15 Best Hardware Stocks According To Goldman Sachs

Page 10 of 13

4. Hewlett Packard Enterprise Company (NYSE:HPE)

Number of Hedge Fund Shareholders In Q1 2024: 49

Hewlett Packard Enterprise Company (NYSE:HPE) is one of two wings of Silicon Valley’s oldest technology company, HP. It caters to the enterprise computing industry and sells products such as switches, servers, and gateways. After Hewlett Packard Enterprise Company (NYSE:HPE)’s latest quarter saw it grow AI shipments by 125% to $900 million, Evercore ISI maintained a $22 share price target and an In Line rating for the stock. Following the earnings, BofA increased Hewlett Packard Enterprise Company (NYSE:HPE)’s share price target to $22 from $19 and kept a Neutral rating. Wells Fargo also maintained an Equal Weight rating, and it increased the share price target to $22 from $19 as well.

Like other stable hardware stocks, Hewlett Packard Enterprise Company (NYSE:HPE)’s forward price to earnings ratio of 11.10 implies that investors do not see it as a growth stock. However, management is quite bullish on AI, and shared during the latest earnings call:

HP is winning in AI because we deliver an end-to-end portfolio designed for the full spectrum of enterprise and used cases spanning large scale model development, training, and inferencing. Customers are attracted to HPE’s market leading super computing capabilities, differentiated Interconnect IP, AI specific software, and services expertise. Since the start of the second quarter, we have won multiple large contracts, totaling more than $800 million from large cloud providers and enterprise customers that will develop, train, and run AI models. Most of these contracts exceed $100 million each. We expect this pipeline to continue to grow and anticipate these deals will generate significant revenue in later quarters. For example, in Q2, (ph) and AI focused deal with Crusoe Energy, a cloud provider pioneered in infrastructure that taps into stranded energy like wasted methane or tractor renewable energy to power compute resources.

Page 10 of 13