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HOUSTON/STOCKHOLM - Hewlett Packard Enterprise (NYSE:HPE), a prominent player in the Technology Hardware industry with a market capitalization of $29.37 billion, and Ericsson announced Thursday they will establish a joint validation lab to address challenges faced by telecommunications service providers deploying multi-vendor infrastructure stacks. According to InvestingPro data, HPE has shown impressive momentum with a 70% surge in stock price over the past six months.
The lab, to be located near Ericsson's headquarters in Sweden, will focus on validating a cloud-native, AI-enabled, dual-mode 5G core solution that combines Ericsson's 5G Core technology with HPE's hardware infrastructure and networking components. This strategic move comes as HPE demonstrates strong business fundamentals, with revenue growth of approximately 14% over the last twelve months. InvestingPro subscribers can access 8 additional key insights about HPE's growth trajectory and market position.
The integrated solution under development will include Ericsson's dual-mode 5G Core, HPE ProLiant Compute DL360 and DL380 Gen12 servers powered by Intel Xeon 6 processors, HPE Juniper Networking fabric with QFX Series switches, and Red Hat OpenShift as the cloud-native platform.
"By integrating Ericsson's cloud-native dual-mode 5G Core and Red Hat OpenShift with our proven next-gen HPE compute infrastructure and HPE Juniper Networking fabric, we are developing a new integrated offering," said Fernando Castro Cristin, vice president and general manager of Telco Infrastructure Business at HPE, according to the press release.
The lab aims to help service providers streamline operations and accelerate innovation while managing the complexity of introducing new services in 5G networks.
Krishna Prasad Kalluri, head of solution and portfolio at Ericsson Core Networks, stated that the partnership "further advances the creation of cloud-native solutions for 5G Core on multi-vendor infrastructure."
The validation lab is expected to be operational by the end of 2025, with the first half of 2026 focused on validating the integrated solution to ensure faster time-to-market and simplified lifecycle management for telecommunications providers. With HPE's current stock price at $22.17 and a solid track record of maintaining dividend payments for 11 consecutive years, investors can find comprehensive analysis and valuation metrics in the Pro Research Report, available exclusively on InvestingPro.
In other recent news, Hewlett Packard Enterprise (HPE) announced its fiscal year 2026 earnings guidance, projecting adjusted earnings per share (EPS) between $2.20 and $2.40. This guidance fell short of the analyst consensus estimate of $2.41, as detailed during HPE's Securities Analyst Meeting where the company also discussed its strategic priorities and financial outlook through fiscal year 2028. Additionally, HPE outlined plans to enhance its networking capabilities and pursue growth in AI infrastructure within enterprise and sovereign customer segments. The company also declared a 10% increase in its annual dividend for fiscal year 2026 and authorized an additional $3 billion for share repurchases, raising the total to approximately $3.7 billion.
Analyst firms have expressed varied reactions to these developments. Bernstein reiterated its Market Perform rating for HPE, highlighting the underwhelming nature of the company's guidance. KeyBanc maintained its Sector Weight rating, noting that HPE's long-term financial targets were less impressive compared to pure-play companies in the IT hardware sector. UBS also reiterated a Neutral rating with a $23.00 price target, anticipating further updates at HPE's 2025 Strategic and Analytical Meeting. These recent developments provide insights into HPE's strategic direction and financial expectations.
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