HPE's 148% networking boom reveals AI infrastructure spending wave — buy the networking names still lagging behind
Hewlett Packard Enterprise just reported its biggest earnings beat since 2018, sending the stock up roughly 30%. The standout number was a staggering 148% jump in networking revenue, signaling that companies are spending heavily on the networking gear that connects AI data centers.
Idea
HPE's 148% networking revenue surge isn't a one-company story — it's proof that AI data centers need massive upgrades to the pipes connecting their servers. That spending should lift the entire networking equipment space, including Arista Networks (ANET) and Cisco (CSCO), which sell similar gear but haven't moved nearly as much today. After a 30% gap-up, HPE itself could keep climbing as analysts revise their price targets higher, but the smarter risk-adjusted play may be buying the networking peers that are still lagging behind this fundamental shift in demand.