Hewlett-Packard Enterprise Company (NYSE:HPE) is one of the AI Stocks Analysts Are Tracking Closely. On August 21, Morgan Stanley analyst Erik Woodring upgraded the stock from Equalweight to Overweight with a price target of $28.00 (from $22.00).
The firm’s rating affirmation reflects increased corporate spending on HPE’s artificial intelligence (AI) and other products.
The analysts noted that their “checks signaled healthy enterprise spending across the board in the quarter, led by anything AI compute or networking related, followed by client devices (strong PC refresh), and then servers/storage, with networking growth inflecting positively for the first time in several quarters.”
The firm looks forward to HPE’s Analyst Day on October 15, as the most important upcoming catalyst for the company.
“We are upgrading HPE to Overweight (from Equal-Weight) with a new $28 price target, or 11x our new FY26 EPS of $2.51. Our thesis is straight-forward – with the closure of JNPR, we see 18% upside to FY26 Consensus EPS, with EPS growing to $2.70-3.00 in FY27, and believe that as the market comes to better understand nearly half of HPE’s business is networking, inclusive of more AI exposure (JNPR in xAI cluster), HPE’s multiple will re-rate above the current 8x multiple. Our 11x target P/E multiple doesn’t even assume HPE garners a peer average multiple, and yet we still see 33% upside to shares from here. The biggest risks to our call are (1) execution — deals always look better on paper than in real-life and the risk here is that this deal is no different / the synergies mgmt outlined don’t materialize as expected, (2) JNPR/Aruba underperforms outside of the xAI exposure as competition is intense in networking and campus upgrade exposure is relatively limited (with risk of JNPR CEO leaving eventually), and (3) FCF and/or capital returns continue to disappoint vs. expectations.”
Hewlett Packard Enterprise Company (NYSE:HPE), an American multinational technology company, provides high-performance computing systems, AI software, and data storage solutions for running complex AI workloads.
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