We recently compiled a list of the 10 Best Stocks Under $50 to Buy Right Now. In this article, we are going to take a look at where Hewlett Packard Enterprise Company (NYSE:HPE) stands against the other stocks.
From a certain perspective, domestic equities are off to a strong start this year. Despite a large selloff on February 21, the S&P 500 has gained a healthy 2.2% in less than two months, and the Nasdaq Composite and Dow Jones Industrial Average are not far behind. If they can keep this momentum going, they’re probably in for another successful year. Looking at the market in detail however, US stock indexes appear to be riding the coattails of the significant lead they built up after Trump’s election on November 5 last year, much unlike their overseas competitors. According to JPMorgan, the relative underperformance of US stocks this year represents a 10% – 20% reversal of the pro-US investment pattern seen from April 2023 until the end of last year. Furthermore, the current excitement around Chinese AI firm DeepSeek has caused investors to reconsider US equity values, making Chinese tech stocks more tempting in the short term.
Inflation expectations have also risen, with the one-year projected inflation rate for US consumers rising to 4.3% in February from 3.3% in January. This increase in inflation expectations, along with a slowing economy, has sparked fears about stagflation, which is characterized as stalled growth and rising prices. According to a Bank of America poll of global fund managers published on February 18, the number of investors expecting stagflation in the coming year has hit a seven-month high. At the same time, investors remained bullish on stocks, perceiving a trade war as a low-probability risk.
However, it would be foolish to rule out US stocks completely, given that US shares outperformed their international counterparts from the 2008 financial crisis to the end of 2024. Although international markets appear to be the hot place to be right now, analysts have much to like about US equities, particularly as S&P 500 companies report their most profitable quarter in years, with Wall Street projecting double-digit profit growth this year. According to Richard Ward, Chief Investment Officer of Curated Wealth Partners, overseas companies have performed better recently because stock pickers are seeking for bargains, not because of their fundamentals. Ward believes that investors should stay in US markets and look towards lower-cost sectors such as small caps and financials instead. He added:
“The US is the best place to be because we continue to benefit from innovation and a healthier economy.”
Our Methodology
For this list, we made use of stock screeners to note down companies with stocks that are trading at less than $50 per share. These companies were then narrowed down based on their popularity among hedge funds. The stocks on this list are ranked in ascending order based on hedge fund sentiment around them, as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A woman programmer in a modern office working with multiple computer servers.
Hewlett Packard Enterprise Company (NYSE:HPE)
Share Price as of February 20: $21.85
Number of Hedge Fund Holders: 66
Hewlett Packard Enterprise Company (NYSE:HPE) offers data services worldwide through its diverse segments, which include Compute, HPC & AI, Storage, Intelligent Edge, Financial Services, and Corporate Investments. The company also provides software-defined infrastructure (SDI) solutions to assist enterprises with network management, storage, automation, and software development and deployment.
On February 13, Hewlett Packard Enterprise Company (NYSE:HPE) announced the shipment of its first NVIDIA Blackwell family-based solution, the NVIDIA GB200 NVL72. HPE’s rack-scale system is intended to assist service providers and major companies in rapidly deploying very large, sophisticated AI clusters with innovative, direct liquid cooling technologies to maximize efficiency and performance. Moreover, the company is known as a pioneer in direct liquid cooling technology, having developed seven of the world’s top ten fastest supercomputers.
Hewlett Packard Enterprise Company’s (NYSE:HPE) Q4 revenue climbed 15.1% year-over-year to $8.46 billion, led by greater sales in artificial intelligence and GreenLake. HPE’s server segment sales increased 32% year-over-year and 10% sequentially to $4.7 billion, owing to strong demand for its AI servers as well as growth in server systems. The division’s operating profit margin was 11.6%, up 150 bps from the year-ago quarter and 80 bps from the preceding quarter. Estimates for the company’s first-quarter fiscal 2025 sales and non-GAAP earnings are $7.67 billion and $0.48 per share, respectively.
Overall HPE ranks 6th on our list of the stocks under $50 to buy right now. While we acknowledge the potential of HPE as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HPE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.