Hewlett Packard Enterprise (HPE) recently announced an expansion of its partnership with NVIDIA Corporation to develop an enterprise computing solution that will facilitate the adoption of generative artificial intelligence (AI) applications by organizations. The new solution is set to be available for order in the first quarter of 2024. This collaboration aims to simplify the development and deployment of generative AI infrastructure for companies of all sizes, allowing them to customize base models using private data and deploy production applications anywhere, from the edge to the cloud.
The computing solution will integrate HPE’s Machine Learning Development Environment, HPE ProLiant Compute, HPE Ezmeral Software, and HPE Cray Supercomputers software with the NVIDIA AI Enterprise software suite, including the NVIDIA NeMo framework. This integration will enable businesses to swiftly adopt and transition to implementing generative AI applications, enhancing their capabilities in this space.
HPE has been focusing on high-margin hybrid IT models that leverage the power of on-premises and cloud computing, with AI, the Industrial Internet of Things, and distributed computing identified as key markets of interest. The company recently expanded its AI solutions portfolio with the acquisition of Pachyderm, a San Francisco-based startup offering software based on open-source technology to automate reproducible machine learning pipelines for large-scale AI applications. This acquisition enhances HPE’s AI-at-scale offerings and optimizes data scientists’ machine learning initiatives while ensuring data reliability and security.
The collaboration between HPE and NVIDIA, along with strategic acquisitions like Pachyderm, has contributed to HPE’s strong performance in eliminating backlogs, improving the supply chain, and gaining customer acceptance. The company’s focus on high-margin offerings like Intelligent Edge and Aruba Central Hyperconverged Infrastructure is boosting its bottom line.
In terms of stock performance, NVIDIA has a Zacks Rank #2 (Buy) while Hewlett Packard has a Zacks Rank #3 (Hold). NVDA and HPE shares have seen strong year-to-date performance, with gains of 220% and 5.8%, respectively. Other top-ranked stocks in the technology sector include Intel Corporation and Aspen Technology, Inc., both carrying a Zacks Rank #1 (Strong Buy) currently.
Intel’s earnings estimates have been positive, with expectations for both the fourth quarter of 2023 and the full year 2023 seeing upward revisions. The company has had a strong track record of surpassing earnings estimates and its stock has gained 65.5% year to date. On the other hand, Aspen Technology has seen earnings estimates rise for the second quarter of fiscal 2024 and fiscal 2024, although the company has faced challenges in meeting earnings expectations in recent quarters. AZPN shares have fallen 3.6% year to date.
Overall, Hewlett Packard Enterprise’s partnership with NVIDIA and strategic acquisitions like Pachyderm position the company well for growth in the AI space and high-margin IT models, demonstrating its commitment to innovation and customer-focused solutions.
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