We recently published a list of Jim Cramer’s Latest Portfolio: 10 Best Stocks to Buy. Since Hewlett Packard Enterprise Co (NYSE:HPE) is on the list, it deserves a deeper look.
Jim Cramer in his latest program talked about discipline during short-term market rallies and emphasized the importance of knowing when to take some profits off the table when things are going your way. According to Cramer, the “most important lesson” in short-term rallies is that “you always have to work hard to prepare yourself for the future.”
Cramer said that you should not “give in” to the market euphoria and hit “buy, buy, buy” when the market is “roaring.” The CNBC host said for many it becomes difficult to sell because they feel they were late to the rally and want to hold on to their best-performing stocks during bull runs. But Cramer questioned this thinking: if your portfolio sees big gains and you let it “ride” the rally without selling any stocks and eventually those gains begin to “evaporate,” how is that different from totally missing out on the rally? “It isn’t,” Cramer said.
Cramer talked about the post-COVID rally of 2020 and 2021 where the market saw an “unbelievable” bull run, only to pare those gains after the Fed’s pivot and its “war” on inflation. Jim Cramer advised investors to always remain “tethered” to reality.
“If you would have sold stocks gradually on their way up as I told you to do you’d have been in a much better shape as the market spent the next 11 months getting obliterated,” said Cramer.
For this article we watched several latest programs of Jim Cramer aired over the past few days and picked 10 stocks he’s bullish on. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A financial advisor talking to a client in the middle of a trading floor.
Hewlett Packard Enterprise Co (NYSE:HPE)
Number of Hedge Fund Investors: 49
A caller recently asked Jim Cramer during his program whether he should buy HPE since Hewlett Packard Enterprise Co’s (NYSE:HPE) liquid cooling solutions are expected to see demand amid the AI data center boom.
“One hundred percent!,” replied Cramer.
Cramer said that he was skeptical of the stock but now he believes “it is just a terrific situation.”
Cramer said he had a lot of “back and forth” with his “friend” Herb Greenberg who has a lot of “positive comments” about the stock.
Hewlett Packard Enterprise Co (NYSE:HPE) recently entered into a partnership with Nvidia Corp. (NVDA) after which the companies will make solutions to allow companies to adopt generative-AI systems in a private-cloud configuration.
Hewlett Packard Enterprise Co (NYSE:HPE) CEO Antonio Neri recently revealed that the company has 300 patents in the area of direct liquid cooling.
Earlier this month, Argus upgraded the stock to Buy, citing “strong positioning and growing opportunity in the AI space.”
Argus analyst Jim Kelleher said in a note that Hewlett Packard Enterprise Co’s (NYSE:HPE) strong position in the ISS server and now GPU server compute market makes it a leading player to benefit in the AI and Cloud industry.
Hewlett Packard Enterprise Co’s (NYSE:HPE) recently reported Q2 report had several bright spots. The results showed that HPE’s server business is rebounding. The segment’s revenue was up 18% year over year while Hewlett Packard Enterprise Co’s (NYSE:HPE) AI systems revenue doubled to a whopping $0.9 billion from $0.4 billion in the year-ago quarter. Hewlett Packard Enterprise Co (NYSE:HPE) also increased its full-year revenue growth guidance to 1%-3% from 0%-2% previously anticipated. Adjusted EPS in the period is expected to come in the range of $1.85 to $1.95, from $1.82-$1.92 previously anticipated. Wall Street expects Hewlett Packard Enterprise Co (NYSE:HPE) earnings to grow 9% next year. Based on AI-related growth catalysts, Hewlett Packard Enterprise Co’s (NYSE:HPE) guidance looks conservative and its forward P/E ratio of 11.59 makes the stock undervalued.
Overall, Hewlett Packard Enterprise Co (NYSE:HPE) ranks 8th on Insider Monkey’s list titled Jim Cramer Latest Portfolio: 10 Best Stocks to Buy. While we acknowledge the potential of HPE as an AI play, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Hewlett Packard Enterprise Co (NYSE:HPE) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published on Insider Monkey.