Hewlett Packard Enterprise HPE is increasingly positioning itself as a key beneficiary of enterprise AI infrastructure spending, with strong demand across AI systems, networking and hybrid cloud solutions. The company’s expanding backlog and rising networking orders indicate that AI-related demand remains ahead of its ability to convert orders into shipments.

HPE’s AI infrastructure portfolio spans servers, storage, networking and private cloud capabilities, allowing customers to deploy AI workloads across data centers and hybrid environments. In the third quarter of fiscal 2026, Cloud & AI revenues rose 25.4% year over year to $9.04 billion, while server revenues increased 35.3%.

HPE’s AI Systems orders reached $2.4 billion, up more than 30% sequentially, and AI Systems backlog climbed 14% to $6.8 billion. HPE also secured a $3.5 billion inferencing deal with a hyperscaler after quarter-end, highlighting the increasing scale of enterprise AI deployments.

Networking is emerging as another important AI growth engine. HPE has expanded its exposure to data center switching, routing, campus and branch networking, as well as security. Networking revenues reached $2.89 billion in the third quarter, while normalized orders increased 36%, materially faster than revenue growth.

Networks-for-AI orders totaled $700 million during the quarter and $2.2 billion cumulatively, prompting management to raise its fiscal 2026 target to $2.5-$3 billion. These factors have led HPE to report a record total AI backlog of $7.6 billion exiting the quarter, while management indicated that its broader pipeline remains multiples of backlog.

How Competitors Fare Against HPE Stock

HPE competes with Super Micro Computer SMCI and Dell Technologies DELL in the AI infrastructure market. However, HPE’s ability to package compute, storage, networking and services into pre-configured solutions can reduce deployment complexity for enterprises and sovereign customers while giving it an edge over its competitors.

Super Micro Computer is on track to scale rack production capacity to more than 6,000 AI racks per month by the end of fiscal 2026, including 3,000 direct liquid cooling racks monthly. Dell Technologies is a major supplier of servers and storage systems, with a broad customer base across enterprises and cloud providers.

Dell provides pre-integrated GPU servers, storage, networking and software for enterprise AI and competes head-to-head with HPE for Fortune 1000 AI deployments. DELL’s scale, established distribution and service offerings make it a formidable competitor.