News about Hewlett Packard Enterprise

Hewlett Packard Enterprise (HPE) shares jumped 4.4% in pre-market trading after the company expanded its AI infrastructure portfolio with Nvidia technologies, including private cloud capabilities, mixed GPU cluster support, and liquid-cooled CPU server racks. An upbeat forecast from Super Micro on AI server demand also supported the move. After the initial pop, the shares cooled to $57.78, up 3.2% from the previous close. Seven days earlier, the stock fell 5.2% when Barclays downgraded it to Equal Weight from Overweight and cut its price target to $77 from $83, lowering its target multiple to 13 times from 14 times fiscal 2028 EPS estimates of $5.92. Barclays said the upside will diminish as memory prices normalize and has yet to see a meaningful AI-driven growth inflection, even though the stock is up 139% year to date and still 21.3% below its 52-week high of $73.46.

Hewlett Packard Enterprise (HPE) fell 5% to $55.87, Super Micro Computer (SMCI) dropped 7% to $32.78, and Dell Technologies (DELL) slid 3% to $458.78 amid a broader selloff in AI hardware stocks. Investors are questioning who will pay for AI data center buildouts, which require heavy upfront spending that flows back to equipment suppliers. Barclays downgraded HPE and Dell to hold, arguing businesses have not yet meaningfully increased AI spending and that recent hardware revenue strength owes more to higher memory component prices. Broader tech funds also declined, with the iShares U.S. Technology ETF (IYW) down 2% and the Invesco QQQ Trust (QQQ) down 1.3%. HPE's growth case rests on AI servers and its networking business, which is still being integrated with Juniper Networks, but revenue could cool once memory prices settle and slower enterprise AI spending could leave growth tied to component prices.

Barclays downgraded Dell, Hewlett Packard Enterprise and NetApp from buy to hold, arguing there has not been a meaningful inflection in enterprise AI spending. Dell shares fell 8% to $465.31, Hewlett Packard Enterprise to $58.57 and Super Micro to $33.13, even though Super Micro was not part of the rating action. According to the article, part of Dell's revenue growth reflects higher component prices driven by a global memory shortage rather than new demand. Dell still booked a record $60.9 billion in AI server orders, ended the quarter with a $95 billion AI backlog, and raised its fiscal 2027 revenue outlook to $192 billion. The next test is whether memory prices hold.