Hewlett Packard Enterprise: AI Boost and Juniper Deal Drive Upgrades

Hewlett Packard Enterprise (HPE) has received a significant boost in its AI prospects and networking capabilities following the announcement of its acquisition of Juniper Networks. The all-cash transaction, valued at approximately $14 billion, is expected to close in late 2024 or early 2025. This strategic move positions HPE as a formidable player in AI-native networks and expands its total addressable market.

The acquisition of Juniper Networks, a leader in AI-native networks, complements HPE's existing portfolio and strengthens its high-margin networking business. Juniper's expertise in AI-native networks, combined with HPE's edge-to-cloud strategy and Aruba Networking, creates a comprehensive portfolio that caters to the growing demand for secure, unified technology solutions. The integration of HPE's Aruba Networking and Juniper's Mist AI and Cloud platform will bring together enterprise reach, cloud-native, and AI-native management and control, creating a premier industry player optimized for hybrid cloud and AI.

The combined company is expected to double HPE's networking business, with the networking business contributing 31% of total revenues and approximately 56% of total operating income. This strategic move will accelerate HPE's long-term revenue growth and expand its gross and operating margins. The transaction is anticipated to be accretive to HPE's non-GAAP EPS and free cash flow in the first year post-close, with operating efficiencies and run-rate annual cost synergies of $450 million expected within three years post-close.



The acquisition of Juniper Networks is a strategic move that aligns with HPE's focus on fortifying its networking business and driving growth in accelerated avenues. This alignment will propel HPE's trajectory toward sustainable and profitable growth, leveraging Juniper Networks' prowess in AI-native networks and significantly amplifying HPE's networking arm. The combined entity is poised to set a new industry benchmark by offering an exhaustive portfolio that meets the toughest demands of customers and partners.

In conclusion, HPE's acquisition of Juniper Networks is a strategic move that will accelerate its long-term revenue growth and expand its gross and operating margins. The combined company will offer a compelling alternative to customers seeking secure, unified, cloud, and AI-native networking solutions, while also driving further innovation and generating significant value for shareholders. As HPE continues to capitalize on transformative technology trends, investors can expect a strong performance from the company in the coming years.