Sept 3 (Reuters) - Hewlett Packard Enterprise ( HPE )

beat Wall Street estimates for third-quarter revenue on

Wednesday, driven by strong demand in its server and networking

segments.

Demand for AI servers has surged as big tech companies and

startups race to deploy generative AI services, such as ChatGPT,

which require immense computing power.

The surge in GenAI has boosted demand for HPE's AI-optimized

servers, powered by Nvidia ( NVDA ) processors, which can run

complex applications. HPE integrated Nvidia's ( NVDA ) latest GPUs into

its server portfolio in 2025.

"Customer demand stretched broadly across our portfolio and

was particularly strong in our Server and Networking segments,"

CEO Antonio Neri said.

HPE's acquisition of Juniper expands its networking

business, a segment that generally grows faster compared to

traditional hardware. HPE completed the $14 billion acquisition

in early July.

The company added veteran tech industry executive Robert

Calderoni to its board in July, reaching a truce with activist

investor Elliott Investment Management, one of HPE's biggest

shareholders with a stake exceeding $1.5 billion.

For the third quarter ended July 31, HPE reported revenue of

$9.14 billion, ahead of analysts' average estimate of $8.53

billion, according to data compiled by LSEG.

Server revenue increased by 16% year-over-year to $4.9

billion, while networking revenue surged 54% to $1.7 billion

during the quarter.

The server maker projects fourth-quarter revenue between

$9.7 billion and $10.1 billion, exceeding analysts' expectations

of $9.54 billion.

HPE now expects revenue growth of 14% to 16% in fiscal year

2025, compared with its prior forecast of growth of 7% to 9%.