HPE's Cloud Portfolio Gains Momentum: What's Driving the Growth?

Hewlett Packard Enterprise’s HPE hybrid cloud segment grew 14.2% year over year in the third quarter of fiscal 2025. HPE offers a variety of solutions across storage, private cloud, infrastructure and software-as-a-service for unstructured data storage, analytics for AI, data protection, storage networking and AIOps-driven intelligence.

In the private cloud, HPE offers capabilities for virtual machines and containers, allowing customer self-management. HPE’s Private Cloud Business Edition allows provisions for monitoring and observability through OpsRamp, and unified data access through the HPE Ezmeral Data Fabric and analytics suite.

HPE’s cloud offerings also cover data lifecycle management and protection, including solutions like Zerto Disaster Recovery. HPE recently launched its Hybrid Cloud Ops Suite, which integrates Morpheus, VM Essentials, OpsRamp, and Zerto to provide customers with a unified experience.

Per its earnings call report, HPE was able to ship more than 5,000 Alletra MP arrays in 2025 and achieved triple-digit revenue growth. The company’s GreenLake cloud product is also experiencing rapid adoption. In the third quarter of fiscal 2025, HPE was able to add 2,000 new users, amassing a total number of 44,000 customers for its GreenLake cloud.

HPE is also experiencing strong momentum in AI Factory private cloud solutions as the number of private cloud AI customers grew two-fold sequentially in the third quarter of fiscal 2025. These factors are helping HPE grow its top line rapidly. At present, HPE is focusing on combining hybrid cloud, AI and networking to enable its Hybrid Cloud segment to cross-sell and bundle its networking, server and storage offerings. Juniper Networks’ acquisition will play a central role in this endeavour.

How Competitors Fare Against HPE

The global cloud space is led by other massive players like Amazon AMZN and Microsoft MSFT. Amazon, through its Amazon Web Services, dominates services, including compute, storage, AI/ML, and hybrid offerings like Outposts and EKS Anywhere.

Microsoft, on the other hand, has a strong presence among enterprises because of its Azure Stack. Microsoft’s collaboration with AI has equipped it with AI Factory-like deployments. However, HPE has an edge in this space as it differentiates itself with the integration of private cloud, AI factory and networking.

HPE’s Price Performance, Valuation and Estimates

Shares of Hewlett Packard Enterprise have gained 6.9% year to date compared with the Zacks Computer - Integrated Systems industry’s growth of 87.6%.

From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 1.28, below the industry’s 7.87.

The Zacks Consensus Estimate for HPE’s fiscal 2025 earnings is pegged at $1.90 per share, which implies a decrease of 4.5% year over year. The consensus mark for fiscal 2026 is pegged at $2.36 per share, indicating a year-over-year increase of 24%. HPE's fiscal 2025 earnings estimates have remained unchanged for the past 30 days, while earnings estimates for fiscal 2026 have been revised downward in the past 30 days.

HPE stock currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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