HPE CEO Antonio Neri Talks Oracle Deal

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Ed Ludlow** (0:07)
Joining us now is HPE CEO, Antonio Neri. Actually, for me, like, you raised forecasts, like, a lot.
What were the reasons behind that? What's changed?

**Antonio Neri** (0:19)
Well, good morning, Ed, and thanks for having me. First of all, we are incredible proud of the results we posted.
And the results are a reflection of the exceptional demand we see and the excellent execution by our teams, which when we think about the underlying drivers of that, is strong demand in networking, strong demand in traditional servers, and expanded profitability. But what we are doing is raising the demand on the confidence on that durability, which gave us the confidence not only to raise once again, you know, our guy for 26, but also the guy for 2027 on a bigger base. So for us, it's to continue to stay focused on that. And the stock reaction is day one, but look, it takes some time for investors to digest it, but we are not worried about that. Generally, it tends to recover very, very quickly.

**Ed Ludlow** (1:12)
Yeah, right now the stock's down 6%, which would be its biggest drop since late June, but it had been down 12%, which would have been the biggest drop since April of 2025
You talked about a specific contract with an unnamed hyperscaler. This is a market where people want the detail, so I ask you, who is that hyperscaler? But what is significant about that arrangement, that the market should be excited about it?

**Antonio Neri** (1:39)
Well, there were two news yesterday that I think the market should be very excited about. One is the strategic expansion with Oracle, which will allow us to actually build a gigawatt scale infrastructure as Oracle continue to grow their AI footprint, and that will include all our HPE Juniper products, meaning scale out QFX switches and scale across, which are PTX routers. That demonstrates the level of innovation and time to market with the latest technology. So you're very proud about that.
And that's a driver into the future. And even in that business, we have not even considered yet to be released the Helio stack, which will include scale up switches. On the Cloud and AI, your reference to that multi-billion dollar deal with a hyperscaler, we cannot share because-

**Ed Ludlow** (2:33)
A server contract.

**Antonio Neri** (2:35)
Yeah, it is a traditional server contract. But interesting enough, it's going to be used internally.
So think about the hyperscaler as an enterprise customer who is going to use our servers to do their own AI inferencing for their own needs. And that's again, another proof point that we have the technology to support any customer in any use case. So we are excited about both. And that's why it points to durability of the demand, because the other trend that we have seen is huge growth in enterprise on adoption of AI.

**Ed Ludlow** (3:10)
Antonio, I don't know if it makes it any easier for you, but I did ask Jensen Wong about circular financing earlier this week on the show.
In the Oracle arrangement, Oracle gets warrants. And so inevitably, the questions are raised, is this or is this not circular financing?

**Antonio Neri** (3:28)
The warrants we are providing actually scale with the amount of infrastructure we're going to build. So as more infrastructure gets deployed, the warrants come with it, which means it strengthens the partnership between the two companies to grow together. And so we both will benefit. It's not the circular financing you're referring to, but it's about incentives on both sides to grow together.

**Ed Ludlow** (3:55)
Let's get away from the numbers and just ask, what's the story here with what's happening in AI build out, right? When Nvidia had its earnings last week, they gave a growth forecast that was modeled with supply, their ability to supply the market. And the status of demand running ahead of supply is quite well known.
What is the situation for HPE? Is it such that you can say, okay, here is what we can comfortably supply or confidently supply to the world, but it would be greater were supply chains improved?

**Antonio Neri** (4:28)
That is the same story, actually.
It is exactly the same framework. So if you think about Q3 results on revenue and the demand, obviously demand significantly outpace revenues, and that revenue growth was 34 percent in the quarter. And underneath that, if you think about networking, we grew 10 percent, but order demand grew 36 percent, so three and a half times faster. But as you think go forward now, you know, look, I have done 35 quarters as a CEO. Normally, we put guides that we want to not only achieve but beat, and that is the confidence that we factor in our supply chain ability to deliver on that number. So related to Q4, we're going to grow revenue almost two billion dollars quarter over quarter, And then, on the bigger base, we're gonna grow 14% to 17%, because we have negotiated multi-year agreements with our suppliers that actually brings the capacity that we need to deliver against that number. But the reality is that demand will continue to outpace supply, and that's a good thing, because what we're doing with customers and working with them, we're interlocking when the supply becomes available and the timing to deliver that revenue and obviously the technology for them.