HPE's Hybrid Cloud Revenues Climb: What's Driving its Growth?

Core Insights - Hewlett Packard Enterprise's (HPE) hybrid cloud segment is experiencing significant growth, driven by the adoption of Alletra MP, expansion of the GreenLake cloud platform, and enterprise AI use cases based on private cloud AI. The hybrid cloud segment grew 14.2% year over year in Q3 of fiscal 2025 [1][8]. Group 1: Hybrid Cloud Growth - HPE shipped over 5,000 Alletra MP arrays in 2025, achieving triple-digit revenue growth [2]. - The GreenLake cloud product saw rapid adoption, adding 2,000 new users in Q3, bringing the total customer base to 44,000 [2][8]. - The number of private cloud AI customers doubled sequentially in Q3 of fiscal 2025, contributing to HPE's top-line growth [4]. Group 2: Innovation and Product Development - HPE launched the HPE Hybrid Cloud Ops Suite, integrating Morpheus, VM Essentials, OpsRamp, and Zerto to enhance its cloud offerings [3]. - Following the acquisition of Juniper Networks, HPE is focusing on combining hybrid cloud, AI, and networking to cross-sell and bundle its offerings [3]. Group 3: Financial Performance and Estimates - The Zacks Consensus Estimate for HPE's fiscal 2025 revenues is $34.54 billion, indicating a growth of 14.6% [4]. - HPE's fiscal 2025 earnings estimate is $1.91 per share, reflecting a decrease of 4% year over year, while the fiscal 2026 estimate is $2.34 per share, indicating a year-over-year increase of 22.7% [9]. - HPE's stock has gained 10.1% year to date, compared to the Zacks Computer-Integrated Systems industry's growth of 27.6% [7]. Group 4: Competitive Landscape - HPE competes with major players like Amazon and Microsoft in the global cloud space, with Amazon leading in services such as compute, storage, and hybrid offerings [5]. - Microsoft has a strong enterprise presence with Azure Stack, but HPE differentiates itself through the integration of private cloud, AI factory, and networking [6]. Group 5: Valuation Metrics - HPE trades at a forward price-to-sales ratio of 0.79, significantly below the industry's ratio of 3.52 [10].