The surge in GenAI has boosted demand for HPE’s AI-optimized servers, powered by Nvidia processors, which can run complex applications. HPE integrated Nvidia’s latest GPUs into its server portfolio in 2025.

"Customer demand stretched broadly across our portfolio and was particularly strong in our Server and Networking segments," CEO Antonio Neri said.

HPE’s acquisition of Juniper expands its networking business, a segment that generally grows faster compared to traditional hardware. HPE completed the $14 billion acquisition in early July.

Server revenue increased by 16% year-over-year to $4.9 billion, while networking revenue surged 54% to $1.7 billion during the quarter.

HPE now expects revenue growth of 14% to 16% in fiscal year 2025, compared with its prior forecast of growth of 7% to 9%.