HPE to Supply Networking Gear for Oracle's AI Data Centers Under Multi-Year Deal, No Revenue Figures Disclosed

Hewlett Packard Enterprise and Oracle announced an expanded networking partnership on Wednesday, September 2, 2026, that will put HPE's Juniper routing and switching equipment into Oracle's AI data centers worldwide. The deal, disclosed alongside HPE's fiscal third-quarter earnings, covers PTX and MX routing platforms and QFX and EX switching platforms, plus multi-year support services and financing, according to HPE's own press release.

As part of the arrangement, HPE issued Oracle warrants to purchase HPE common stock. That's a real cost to existing HPE shareholders if Oracle exercises them, since new shares dilute ownership. Neither company put a dollar figure on the deal or disclosed a guaranteed purchase volume, a gap Yahoo Finance flagged directly, noting the release describes "potential deployments" without "booked revenue."

Rami Rahim, HPE's networking chief, said in the company's statement that the goal is "a high-performance networking architecture that helps Oracle address the traffic management, power, space, and operational requirements of increasingly large AI environments." Mahesh Thiagarajan, who runs Oracle Cloud Infrastructure, said in Quartz's reporting that "HPE Juniper Networking has been an important part of our cloud architecture and now plays a key role in our AI clusters, regional data centers, and edge networks."

The Case For HPE

HPE's argument, made across its own release and echoed by IT Pro and TechAfrica News, is straightforward: AI clusters increasingly live or die on networking, not just GPUs. The latest QFX switches are built to handle RoCEv2 traffic, the protocol AI backend networks use to move massive data loads with minimal delay, according to HPE.

The numbers back up HPE's momentum independent of Oracle. Networking revenue jumped 75% to $2.9 billion in HPE's fiscal third quarter, with data center networking more than doubling and routing revenue up 270%, Quartz reported. HPE posted $12.21 billion in quarterly revenue, up 34% year over year, and adjusted earnings per share climbing more than 30% to $1.11, according to BigGo Finance. HPE raised its full-year revenue growth forecast to 34% to 37%. CEO Antonio Neri told Yahoo Finance that customers are "buying everything," citing brisk orders for routers and servers.

Institutional interest has followed the story. Insider Monkey counted 85 hedge funds holding HPE stock as of June 30, up from 58 three months earlier, per Yahoo Finance. Elliott Management increased its HPE stake 18% during the quarter to 32,271,985 shares.

The Case For Skepticism

Yahoo Finance's analysis raises a key point that deserves more attention than the press-release coverage gives it: this is a framework agreement, not a signed purchase order. HPE still has to integrate Juniper, protect its margins, and compete against entrenched networking vendors while a customer as large as Oracle negotiates hard on price.

Short sellers weren't buying an easy story even before the deal. As of the August 14 settlement date, 59.57 million HPE shares were sold short, about 4.5% of the float, with 3.34 days to cover, Yahoo Finance reported. That snapshot predates the September 2 announcement, but it shows real skepticism heading into it, not a market bracing for a squeeze.

Oracle's side of the ledger carries its own risk. The company's capital expenditures hit $55.7 billion in fiscal 2026, up from $21.2 billion the year before, and Oracle has guided for roughly $70 billion in net capital expenditure spending in fiscal 2027, Quartz reported, citing Oracle's own earnings call statements. That spending is largely debt-funded. A networking partnership that improves how fast Oracle can build data centers doesn't protect Oracle's returns if AI demand or pricing softens before that capital gets paid back.

Oracle shares climbed 5.7% on Thursday, September 3, the day after the announcement, and gained another 1.2% in overnight trading, extending a rally that has taken the stock 15% higher over the past month, according to BigGo Finance. Even so, Oracle stock remains down 20.2% year-to-date, per the same report, showing how much ground the earlier selloff carved out.

What's Next

Oracle is scheduled to report fiscal first-quarter earnings on Thursday, September 10. Analysts are projecting 28% revenue growth to $19.13 billion, according to BigGo Finance, which also notes investors will be watching Oracle's cloud infrastructure growth, which surged 93% in the prior quarter, and its $638 billion remaining performance obligation backlog. Whether that backlog converts into cash, and whether the HPE networking arrangement converts into disclosed orders rather than just "potential deployments," are the two open numbers this deal still hasn't answered.