The strategic acquisition of Juniper Networks by Hewlett Packard Enterprise presents the company with improved standing within global AI infrastructure. Combining the emerging AI functionality capabilities with this acquisition, HPE has a bright future where consistent growth in the rapidly growing AI space is assured.
Hewlett Packard Enterprise Company, HPE, is a global technology company with business dimensions across enterprise products and services. The company mainly functions in the areas of servers, storage, networking, and cloud solutions. It was founded in 2015 through the Hewlett-Packard split. It is unique compared to its peers as it has an integrated hardware and software edge-to-cloud platform that helps businesses transform their IT infrastructures toward greater accelerated digital transformation.
HPE provides general-purpose and workload-optimized servers through different lines and offers hybrid cloud solutions for cloud-native and hybrid capabilities in the storage and infrastructure layers. It delivers intelligent edge networking solutions to improve connectivity and security in addition to flexible financial options including leasing and financing. The major portion of its revenue comes from product sales, subscription services, and consulting.
From giant enterprises to small and medium-sized businesses and public sector organizations in healthcare, financial services, manufacturing, and telecommunication, HPE caters to a diversified client base. The firm represents customers looking to further optimize IT operations, enhance their means of data management, and deploy innovative technology solutions for business growth. With a laser focus on AI-driven technology, HPE is revolutionizing the tech world.
The company will capitalize on its already-developed experience in fast servers and its partnership with industry leader NVIDIA. By 2025, the AI products developed by HPE would constitute 18% of its revenue, while for the year 2026, that would shoot up to 21%, amounting to a strong $5.9 billion and $7.4 billion respectively.
Initiatives such as the Unleash AI partner program with NVIDIA are clear evidence that HPE isn’t one simply chasing a trend. On the contrary, it is the one setting the trend. With IT leaders turning the focus to generative AI and distributed cloud and edge computing, HPE has the very equipment that will fulfill all the demands for advanced AI infrastructure.
But that’s not all. The acquisition of Juniper Networks by HPE will supercharge its AI game. That’s how strategic combination will bridge critical gaps in wide-area and cloud networking, enhancing the ability to deliver seamless AI-native solutions. Juniper’s strengths will complement HPE’s robust infrastructure seamlessly, enhancing the company’s capabilities and expanding the networking segment of the company to 31% of the total revenue following the acquisition. This strategic move is more than just filling existing gaps; it positions HPE to capture much larger shares of an AI market that is itself projected to approach $5.8 trillion in global IT spending by 2028.
Our bullish thesis is driven by HPE’s scalable AI platforms, accelerated servers, and its smart Juniper Networks acquisition. The company stands atop an emerging AI landscape, which will soon offer much wider market opportunities, improved profitability, and long-term growth. It can be said that HPE is not only adapting to the future but also shaping it.
HPE isn’t on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held HPE at the end of the second quarter which was 58 in the previous quarter. While we acknowledge the potential of HPE as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as HPE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
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