We recently published a list of 10 Best Affordable Stocks Under $20 to Buy. In this article, we are going to take a look at where Hewlett Packard Enterprise Company (NYSE:HPE) stands against other best affordable stocks under $20 to buy.
Could the Stock Market Fall to All-Time Lows?
On May 6, Paul Tudor Jones, Tudor Investment Corporation founder and CIO, and Robin Hood Foundation founder and board member, appeared on CNBC’s ‘Squawk Box’ to talk about Trump’s tariff policies, the latest market trends, and the state of the economy. He opined that the stock market would hit new lows even if Trump decides to dial down China tariffs by 50%.
He said the state of the economy is pretty clear: Trump is locked in on tariffs, and the Fed is locked in on not cutting rates, and that mix is not good for the stock market. According to Jones, the stock market is thus expected to hit new lows. Tariffs would have been great for the market, but not to the extent Trump is using them, and that is pushing the market to the tipping point.
READ ALSO: 10 Best Low Priced Biotech Stocks to Buy Now and 11 Most Promising Future Stocks According to Hedge Funds.
De-escalation in the China and US Trade War
Trade relations between China and the US seem to be thawing. On May 12, CNBC reported that the two countries decided to suspend tariffs for 90 days on each other’s goods, causing a significant trade breakthrough between two of the largest global economies. As per the deal, “reciprocal” tariffs on the two countries will be slashed from 125% to 10%. However, since the 20% levies on Chinese imports surrounding fentanyl are said to remain in place, the total tariffs on Chinese goods come up to 30%.
This trade breakthrough followed high-stakes talks between representatives of China and the US in Switzerland. US Treasury Secretary Scott Bessent said the following about the situation in a news conference:
“We had very productive talks, and I believe that the venue, here in Lake Geneva, added great equanimity to what was a very positive process. We have reached an agreement on a 90-day pause and substantially move down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115%.”
What Does the US-China Trade War Truce Mean for the Stock Market?
The two countries also announced optimistic plans to continue their discussions on trade and economic policies in the future. CNBC reported that Mark Williams, chief Asia economist at Capital Economics, called this truce “a substantial de-escalation.” In a research note, Williams said:
“However, the US still has much higher tariffs on China than on other countries and still appears to be trying to rally other countries to introduce restrictions of their own on trade with China. In these circumstances, there is no guarantee that the 90-day truce will give way to a lasting ceasefire.”
Furthermore, Tai Hui, APAC chief market strategist at J.P. Morgan Asset Management, opined that the tariff reduction between the two countries was much larger than expected. He said that investors are still looking forward to further details on other trade terms, such as whether rare earth export restrictions would be relaxed from the Chinese side.
“This reflects both sides recognizing the economic reality that tariffs will hit global growth and negotiation is a better option going forward,” Hui stated in a research note. “The 90-day period may not be sufficient for the two sides to reach a detailed agreement, but it keeps the pressure on the negotiation process.”
Our Methodology
We sifted through the Finviz stock screener to compile a list of the best affordable stocks under $20 with forward P/E ratios under 15, and chose the top 10 with the highest number of hedge fund holders, as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is ordered in ascending order of hedge fund sentiment.
Note: The data was recorded on May 14.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
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Hewlett Packard Enterprise Company (NYSE:HPE)
Stock Price: $17.92
Forward P/E: 10.01
Number of Hedge Fund Holders: 66
Hewlett Packard Enterprise Company (NYSE:HPE) is a global global edge-to-cloud company that delivers open and intelligent technology solutions as a service. The company offers compute, cloud services, intelligent edge, high performance computing & artificial intelligence, software, and storage. Its operations are divided into the Server, Hybrid Cloud, Intelligent Edge, Financial Services, and Corporate Investments and Other segments.
Hewlett Packard Enterprise Company (NYSE:HPE) is the second-best affordable stock under $20 to buy on our list. On April 16, Bank of America Securities analyst Wamsi Mohan maintained a Buy rating on the stock, setting a price target of $20.00. The analyst highlighted the company’s value creation potential, claiming that the valuation on a sum-of-the-parts basis is especially attractive. Aruba alone represents a considerable portion of the enterprise value.
Mohan also opined that the involvement of activist investor Elliott Management, which holds a significant stake in the company, points to a belief in Hewlett Packard Enterprise Company’s (NYSE:HPE) undervaluation compared to its peers like Dell.
The analyst also highlighted that there are opportunities for operational improvements in the company, especially after last quarter’s performance issues.
Overall, HPE ranks 2nd on our list of the best affordable stocks under $20 to buy. While we acknowledge the potential for HPE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than HPE but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
