Hewlett Packard Enterprise (HPE) is well-positioned to take advantage of the growing AI market with strong product offerings in servers, storage, networking, and the GreenLake cloud. AI revenue currently accounts for about 12.5% of total revenue and is projected to reach over $5 billion in fiscal year 2024. Key drivers of AI growth for HPE include a strong order backlog of $3.1 billion, GreenLake cloud solutions, and storage revenue growth.
HPE’s acquisition of Juniper Networks is expected to strengthen its competitive edge in the AI market by providing end-to-end solutions from edge to cloud. By combining forces, HPE and Juniper could enhance AI-powered enterprise network operations and security solutions. Additionally, recent results show strong annual recurring revenue growth indicating HPE’s success in transitioning its business model and capturing AI workloads.
Looking ahead, HPE anticipates growth in its server business, hybrid cloud solutions, and intelligent edge offerings. With a forecasted growth rate of 6% beginning in fiscal 2025, driven by networking, cloud, server, and storage businesses, HPE is poised for further success. Valuation analysis suggests that HPE’s current stock price is undervalued, with a one-year price target of $32 per share.
However, there are potential risks to consider, such as regulatory hurdles for the Juniper acquisition, the sale of stake in China-based H3C, and competition from companies like Dell and Super Micro Computer in the server market. Overall, HPE’s strong position in key growth areas and undervalued stock price lead to a “Buy” rating from analysts.
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https://seekingalpha.com/article/4702432-hewlett-packard-enterprise-ai-growth-from-cloud-core-and-edge-initiate-with-buy
