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Investing.com - Hewlett Packard Enterprise (NYSE:HPE) is well-positioned to meet expectations for its October quarter with potential upside to January quarter guidance, according to Evercore ISI analysts on Monday. Currently trading at $23.45 with a market cap of $30.94 billion, HPE has seen a remarkable 40.59% price increase over the past six months. InvestingPro data indicates the stock may be slightly overvalued at current levels.
The firm maintained its Outperform rating and $28 price target on HPE stock, noting the company could exceed current Wall Street revenue and earnings per share estimates of $9.87 billion and $0.55 for the January quarter. HPE previously reaffirmed its fiscal fourth-quarter outlook of $9.7-10.1 billion in revenue and $0.56-0.60 in earnings per share.
Evercore believes HPE’s integration of Juniper Networks could accelerate in the first half of the fiscal year, potentially driving additional upside as the company reduces combined costs. The firm highlighted HPE’s increased focus on AI compute profitability, with approximately 50% of compute orders coming from enterprise and sovereign customers. HPE has demonstrated strong revenue growth of 13.97% over the last twelve months, reaching $33.08 billion. Analysts maintain a moderate buy consensus on the stock, according to InvestingPro, which offers comprehensive analysis on over 1,400 US equities through its Pro Research Reports.
The networking segment, described as the key profit driver for the newly combined business, is expected to benefit from ongoing campus refresh cycles and AI connectivity investments from enterprises. The January quarter will include a full quarter of Juniper’s contribution, compared to only one month in the previous quarter.
Evercore analysts suggested that expectations for HPE’s performance are currently low, and consistent quarter-to-quarter execution could improve investor confidence in the company’s outlook.
In other recent news, Hewlett Packard Enterprise (HPE) announced it will deliver two new supercomputers to Los Alamos National Laboratory as part of a $370 million investment by the U.S. Department of Energy. In another development, HPE has expanded its NVIDIA AI Computing portfolio with new private cloud solutions, featuring the second generation of HPE Private Cloud AI and new servers, claiming improved price-to-performance for enterprise AI workloads. Additionally, HPE has been selected to build two advanced computing systems for Oak Ridge National Laboratory, which will aid in scientific research and national security. These systems, named Discovery and Lux, will support AI and supercomputing initiatives.
Hewlett Packard Enterprise also announced a collaboration with Ericsson to establish a joint lab focused on validating 5G core solutions. This lab will be based in Sweden and aims to address challenges faced by telecom service providers. Moreover, HPE declared a dividend for its Series C preferred stock, payable in December 2025. These recent developments highlight HPE’s ongoing efforts in expanding its technological infrastructure and strategic partnerships.
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