How does HPE's current performance and acquisition strategy compare to its main competitors in the server and networking markets?

Fundamentals & acquisition play

HPE’s Q3 2025 results showed a “record‑breaking” revenue run and a noticeable lift in operating margin, driven by a broad‑based surge in server and networking demand. The headline‑making acquisition of Juniper Networks gives HPE a high‑margin, carrier‑grade routing platform that it previously lacked—effectively moving HPE from a “best‑in‑class” server vendor to a more end‑to‑end “edge‑to‑cloud” player. By folding Juniper’s portfolio into its existing HPE GreenLake services, the company can now offer a deeper, software‑defined networking stack and capture higher‑margin subscription revenue, a differentiator the rest of the market is still scrambling to match.

Competitive landscape

Cisco remains the dominant networking player, but its growth is increasingly tied to recurring SaaS and AI‑driven software, while hardware margins have been under pressure. It has not pursued a large‑scale hardware acquisition in the past three years, leaving Cisco vulnerable to a more vertically integrated rival that can bundle Juniper’s routing with its own data‑center and edge solutions. Dell Technologies continues to focus on private‑cloud and high‑density server sales, yet it has relied solely on organic growth—its balance sheet is solid, but it lacks the network‑hardware breadth that HPE now possesses. Lenovo is expanding its server line in partnership with hyperscalers but is still a pure hardware play without a robust networking stack. In short, HPE’s combined server‑plus‑networking proposition is now more complete than Dell’s or Cisco’s, and its margin profile is set to improve relative to peers that are still “best‑of‑class” in one segment only.

Trading implications

The market has already rewarded HPE’s momentum: the stock is holding near its 52‑week high with a bullish, higher‑highs/lower‑lows chart pattern. Assuming the Juniper integration proceeds on schedule, the upside to earnings per share could be 8‑10 % YoY, supporting a forward‑EV/EBIT margin multiple of ~5–6× (still below Cisco’s ~7×, indicating room for re‑rating). A pull‑back to the 200‑day moving average (~$150) would likely be a low‑risk entry point, with a medium‑term target around $180–$190 if HPE can sustain the double‑digit server growth and begin to monetize GreenLake‑Juniper cross‑sales. Conversely, Cisco’s higher valuation and slower hardware margin expansion leaves it more exposed to a pull‑back if market sentiment shifts toward integrated edge solutions. For a short‑to‑medium‑term view, consider a bullish stance on HPE on dips, while keeping a watch‑list of Cisco on any unexpected margin compression or supply‑chain shock.