Hewlett-Packard Enterprise Company (NYSE:HPE) is one of the Trending AI Stocks on Wall Street. On November 10, Evercore ISI maintained its Outperform rating on the stock with a $28 price target.
The firm has also added HPE to its Tactical Outperform List, anticipating robust Jan-quarter guide, Juniper synergies, and AI compute margin lift to drive continued outperformance.
According to the firm, HPE’s integration of Juniper Networks will likely accelerate in the first half of the fiscal year. This will drive additional upside as the company reduces combined costs.
Evercore ISI also discussed HPE’s increased focus on AI compute profitability, with an estimated 50% of compute orders coming from enterprise and sovereign customers. The increased emphasis will likely streamline margin expansion, the firm noted.
Meanwhile, the networking segment is expected to benefit from ongoing campus refresh cycles and AI connectivity investments from enterprises.
“We believe HPE is well positioned to report an in-line Oct-qtr but we see room for modest upside on the Jan-qtr guide. High level, focus will remain on Juniper integration but given that management de-risked the FY26 outlook, we think HPE could guide the Janqtr above the Street revs/EPS estimates of $9.87B/$0.55. HPE reaffirmed its FY25 outlook and its FQ4 outlook of revs and EPS of $9.7B–10.1B and $0.56–60, though it prudently guided FY26 given Juniper integration and tougher y/y comps. We think the lower bar sets HPE up well to outperform expectations and string together another quarter of solid execution. In addition, we expect HPE to expedite early integration of Juniper (in H1) and this could help drive incremental upside as HPE sheds aggregate costs. We also think the higher emphasis on AI compute profitability will help streamline margin expansion, as HPE is placing higher scrutiny on AI compute deals and shifting more towards enterprise and sovereign deals; ~50% of compute orders are from these two customer categories. Networking should also benefit from the ongoing campus refresh, as Sep-qtr VARs and distributors pointed to solid networking growth from campus but also AI connectivity investments from enterprises. Networking remains the key profit driver of the newly combined business and HPE should benefit from a full quarter of Juniper contribution, as LQ only saw one month. Net/Net: We think HPE could guide the Jan-qtr above current street estimates, as we think expectations around the quarter and guide are low. In addition, a return to solid execution quarter-to-quarter should help improve investor confidence. Maintain our OP rating and $28 target.”
Hewlett Packard Enterprise Company (NYSE:HPE), an American multinational technology company, provides high-performance computing systems, AI software, and data storage solutions for running complex AI workloads.
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