HPE's networking revenue doubled — ride the demand wave into networking suppliers
Hewlett Packard Enterprise just reported its best earnings surprise in years, with networking revenue more than doubling. The stock surged 30% in a single day.
Idea
HPE's networking revenue jumping 148% tells us enterprises are spending aggressively on the plumbing that connects AI data centers — routers, switches, and optical gear. HPE already moved 30%, but the companies that actually make those networking components, like Arista Networks and Ciena, haven't fully priced in this demand surge yet. When one company in a supply chain blows the doors off earnings, its suppliers and competitors often play catch-up in the days that follow. Broadcom is a broader play that also stands to benefit from the same networking upgrade cycle. This is a 'rising tide lifts all boats' situation in enterprise networking.