Is HPE the Next Big AI Stock? Goldman Sachs Weighs In
Hewlett-Packard Enterprise Company (NYSE: HPE) is gaining attention as one of the AI stocks making moves on Wall Street. On July 23, Goldman Sachs analyst Michael Ng reinstated coverage on HPE with a “Neutral” rating and a price target of $22. This comes after HPE’s acquisition of Juniper Networks, which expanded its portfolio significantly.
Goldman Sachs highlights that the acquisition helped HPE maintain its position as the second-largest player in enterprise and campus networking. It also strengthened HPE’s standing in the data center segment, making it a more formidable competitor.
Positive Outlook on Networking, Caution on Other Divisions
Despite the optimistic view of HPE’s networking business, Goldman Sachs retains a Neutral stance on the stock. The reason lies in ongoing challenges within HPE’s Server and Hybrid Cloud divisions, which could impact overall performance.
The bank projects earnings per share of $1.80 for fiscal 2025, $2.23 for fiscal 2026, and $2.42 for fiscal 2027. These estimates reflect cautious optimism but also underline uncertainties in key segments.
What HPE Brings to AI and Enterprise Tech
Hewlett-Packard Enterprise is a major American multinational technology company offering high-performance computing systems, AI software, and data storage solutions. These products are designed to support complex AI workloads, which positions HPE well within the technology landscape focused on artificial intelligence.
While HPE shows promise as an investment, Goldman Sachs suggests that some AI stocks might present greater upside potential with less downside risk. Investors should weigh the company’s strengths against the challenges it faces in certain divisions before committing.
Considerations for Investors
- HPE’s expanded networking portfolio strengthens its competitive edge.
- Server and Hybrid Cloud segments remain areas of concern.
- Earnings estimates indicate moderate growth over the next few years.
- Other AI stocks may offer better risk-reward profiles.
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