HOUSTON--(BUSINESS WIRE)--HPE (NYSE: HPE) today named Phil Mottram as Executive Vice President and Chief Sales Officer, effective November 1, 2025. In this role, Mottram will lead HPE's global sales teams across the company's Servers and Hybrid Cloud solutions, as well as its channel and partner ecosystem. Mottram joined the company in 2019 and has held executive management roles including leading HPE's networking business for four years. Most recently, Mottram served as the Executive Vice Pres. ...

Key Takeaways HPE's Networking revenues surged 54.3% to $1.73B in Q3 2025 after acquiring JuniperNetworking operating profit climbed 43% to $360M, driven by Juniper and Intelligent EdgeThe Juniper deal expands HPE into routers, firewalls, and data-center networking, boosting margins.Hewlett Packard Enterprise’s (HPE) networking business, which mainly included wired and wireless local area networks, data center switching, software-defined wide-area-networks, cellular network software, network security and th ...

Group 1 - Near-term concerns regarding an AI-bubble exist, but long-term benefits from artificial intelligence are anticipated for the IT sector [1] - Companies such as Apple, Dell Technologies, and HP Enterprise are highlighted as key players in the IT industry [1]

Industry Overview - The global server market is projected to grow at a CAGR of 9.8% from 2024 to 2030, driven by strong adoption across various industries including healthcare, retail, BFSI, manufacturing, and education [1] Super Micro Computer (SMCI) - SMCI's growth is primarily fueled by the increasing demand for artificial intelligence (AI) workloads, with a significant rise in data centers and their capacity [3] - The company's next-generation air-cooled and liquid-cooled GPU and AI platforms are contributing over 70% to its revenue in Q4 of fiscal 2025 [4] - SMCI is currently facing challenges such as delayed purchasing decisions from customers and margin contraction due to price competition and inventory write-downs [5][6] - The Zacks Consensus Estimate indicates a decline in SMCI's EPS for the first and second quarters of fiscal 2026 by 37% and 5% respectively, with downward revisions for fiscal 2026 and 2027 EPS in the past 60 days [7] Hewlett Packard Enterprise (HPE) - HPE's server business experienced a 16.1% growth in Q3 of fiscal 2025, reaching an all-time high, driven by large AI deals and a significant increase in AI systems revenues to $1.6 billion [8][9] - The company reported a 100% quarter-over-quarter increase in orders for its AI server business, with improved operating margins due to pricing reforms [10] - HPE's newly launched ProLiant Gen 12 server platform enhances performance, security, and cooling technology, strengthening its competitive position [11] - HPE has raised its non-GAAP net earnings per share estimates to $1.88-$1.92, reflecting upward revisions in the consensus estimates for fiscal 2025 and 2026 [12] Stock Performance and Valuation - Year-to-date, SMCI shares have increased by 47.6%, while HPE shares have risen by 15.8% [13] - SMCI is trading at a forward 12-month ratio of 0.84X, slightly above its median, while HPE is at 0.83X, also above its median [14] Conclusion - HPE is considered a more compelling investment option due to its strong server portfolio and growth prospects, while SMCI faces near-term challenges related to customer purchasing delays and margin pressures [16] - HPE currently holds a Zacks Rank 2 (Buy), whereas SMCI has a Zacks Rank 3 (Hold) [17]

Core Insights - A significant decline in value percentile rankings has affected several major technology companies, indicating a shift in market perceptions regarding their relative worth and fundamental strength [1] Group 1: Value Ranking Explanation - The value ranking utilizes percentile-based metrics to compare a company's market price with its core fundamentals, including assets, earnings, sales, and operating performance [2] Group 2: Declining Value Rankings of Tech Stocks - Notable tech stocks experiencing significant decreases in their value scores include Hewlett Packard Enterprise Co. (HPE), Vimeo Inc. (VMEO), DocuSign Inc. (DOCU), and Yext Inc. (YEXT) [3][8] - The decline in value rankings for these companies suggests that the perceived overvaluation in the tech sector is being actively challenged [8] Group 3: Company-Specific Value Ranking Changes - Hewlett Packard Enterprise's value ranking fell dramatically from 69.79 to 29.86, a decrease of 39.93 points week-on-week, while the stock gained 15.18% year-to-date and 43.53% over the year [9] - Vimeo's value percentile dropped from 57.23 to 26.75, a decrease of 30.48 points, with a year-to-date increase of 19.14% and a yearly increase of 52.27% [9] - DocuSign's value score decreased by 22.32 points to 23.24, with a year-to-date decline of 11.25% and a yearly increase of 41.28% [9] - Yext's value metric declined from 27.62 to 9.04, a drop of 18.58 points, with a year-to-date increase of 32.26% and a yearly increase of 33.08% [9]

Core Viewpoint - Goldman Sachs significantly raised growth expectations for AI servers and AI data center switches, indicating that data center hardware driven by AI is the strongest theme in the US tech sector, while traditional equipment demand remains weak [2][3]. AI Server and Data Center Switch Growth - AI data center switches are projected to reach a market size of $26 billion by 2029, with a CAGR of 36%, a substantial increase from the previous forecast of $2 billion, primarily due to concentrated demand release in 2028-2029 [3]. - Traditional servers are expected to decline at a CAGR of -2% from 2024 to 2029, while traditional data center switches will grow at a mere 5%, highlighting a stark contrast with the AI sector [3]. Key Players in AI Server Market - Dell has emerged as the largest winner in the AI server market, with significant market share gains [4]. - The growth of AI servers is highly concentrated in the secondary cloud service provider segment, which is expected to achieve a CAGR of 66% over five years, reaching a size of $239.298 billion by 2029 [5]. Market Share Dynamics - In the secondary cloud service provider market, Dell's market share surged by 22 percentage points to 46%, while competitors like NVIDIA, Supermicro, and white-box manufacturers saw declines [6]. - In the enterprise market, Dell's share increased by 13 percentage points to 30%, while NVIDIA's share dropped by 6 percentage points to 16% [6]. AI Data Center Switches - Ethernet technology dominates the growth in the switch market, particularly in backend products, which are expected to grow at a CAGR of 50% from 2024 to 2029, reaching $14 billion [7]. - Frontend Ethernet switches are projected to grow at a CAGR of 46%, reaching $10 billion by 2029, while InfiniBand switches are expected to decline at a CAGR of -1% [7]. Customer Demand for AI Switches - Enterprise customers show the most urgent demand for AI switches, with a projected CAGR of 64% over five years [9]. - Secondary cloud service providers and super-scale enterprises are also expected to see significant growth, with CAGRs of 55% and 41%, respectively [9]. Company Ratings and Outlook - Arista Networks (ANET) is rated "Buy" with a target price of $155, benefiting from strong revenue from major cloud giants [10]. - Dell Technologies (DELL) is rated "Buy" with a target price of $150, supported by trends in AI server demand and IT spending recovery [11]. - Cisco Systems (CSCO) is rated "Neutral" with a target price of $37, facing market share challenges but with a solid backlog [13]. - Hewlett Packard Enterprise (HPE) is rated "Neutral" with a target price of $25, with concerns over profitability in its server and hybrid cloud segments [15]. - Supermicro (SMCI) is rated "Sell" with a target price of $27, facing challenges from commoditization in the AI server market [17].

Group 1: AI Server Demand and Market Dynamics - The demand for AI servers in the hardware sector is showing a differentiated trend, with Dell Technologies (DELL.US) capturing high-end market share from Super Micro Computer (SMCI.US) and HPE (Hewlett Packard Enterprise) achieving growth through cost control [1] - The traditional enterprise server market is under short-term pressure as companies prioritize investment in AI infrastructure [1] - Goldman Sachs predicts that by 2027, mature cloud service providers will gradually shift towards ODM custom or semi-custom server designs, while Dell and HPE may see a decline in x86 unit sales but can maintain stable revenue through high average prices and profit margins [1] Group 2: Backend Network Market and Future Projections - The backend scale-out network market is expected to reach a total size of $23 billion by 2029, with the Ethernet scale-out incremental market projected to be around $8 billion to $10 billion [1] - NVLink currently dominates the scale-out backend network, but Ethernet is expected to become a strong competitive alternative in the future, while UALink and PCIe will maintain niche market positions [1] Group 3: Software Technology and AI Network Competitiveness - In the software technology sector, AI networks remain competitive across hyperscale, secondary cloud/new cloud, enterprise, and sovereign customer verticals [2] - Hyperscale enterprises are driven by strong demand for AI economic transformation, with brand suppliers continuing to dominate [2] - The secondary cloud sector shows that Spectrum-X bundled network/computing solutions are the most adaptable, while OEMs like Dell, HPE, and Cisco (CSCO.US) hold advantages in the enterprise market due to their extensive customer base and distribution capabilities [2] Group 4: Communication Technology and Market Trends - Companies like Cisco, HPE, and Juniper are actively participating in the AI network market, while market share data from Arista Networks (ANET.US) and Tianhong Technology (CLS.US) indicates that there is no trend of brand suppliers shifting towards white-box switches in the scale-out field [2]

Group 1 - Hewlett Packard Enterprise (HPE) is considered one of the best inexpensive stocks to buy according to hedge funds, with a price target raised to $21 from $16 by Susquehanna analyst Mehdi Hosseini [1] - HPE achieved total revenue of $9.1 billion, an 18% year-over-year increase, driven by AI, networking, and hybrid cloud segments [2] - The networking segment, now including Juniper Networks, saw a 54% year-over-year revenue increase to $1.7 billion, contributing approximately 50% to HPE's non-GAAP consolidated operating profit [3] Group 2 - The server segment revenue reached $4.9 billion, reflecting a 16% increase, while AI systems revenue hit an all-time high of $1.6 billion, with AI orders nearly doubling sequentially [3] - HPE has a record AI backlog of $3.7 billion, indicating strong future demand in the AI sector [3] - The acquisition of Juniper Networks is expected to generate at least $600 million in cost synergies over the next three years [2]

Core Insights - Hewlett Packard Enterprise Company (NYSE:HPE) is identified as a strong growth stock under $50, with a Buy rating maintained by J.P. Morgan and a price target set at $30.00 [1] Financial Performance - For fiscal Q3 2025, HPE reported revenue of $9.1 billion, representing a 19% increase from the previous year in actual dollars and an 18% increase in constant currency [2] - The annualized revenue run-rate (ARR) for the quarter reached $3.1 billion, reflecting a 77% growth from the prior-year period in actual dollars and a 75% increase in constant currency [2] - Free cash flow increased by $121 million from the prior-year period to $790 million, while capital returns to common shareholders amounted to $171 million in dividends [3] Business Segments - HPE operates across several segments, including Server, Hybrid Cloud, Intelligent Edge, Financial Services, and Corporate Investments and Other [4] - The company provides a range of technology solutions, including compute, cloud services, intelligent edge, high-performance computing & artificial intelligence, software, and storage [3]

Core Insights - Hewlett Packard Enterprise (HPE) has outperformed the Zacks Computer - Integrated Systems industry, gaining 15.9% in the past month compared to the industry's 2.8% [1] Group 1: Cloud Offerings and Growth - HPE is experiencing significant growth in its hybrid cloud segment, which grew 14.2% year over year in Q3 of fiscal 2025, driven by the adoption of Alletra MP and the expansion of the GreenLake cloud platform [4][5] - The GreenLake cloud product has added 2,000 new users in Q3 of fiscal 2025, bringing the total to 44,000 customers [5] - HPE's AI Factory private cloud solutions have seen a two-fold increase in private cloud AI customers sequentially in Q3 of fiscal 2025 [7] Group 2: Server Business Performance - HPE's server business grew 5.6% in Q2 of fiscal 2025, with expectations for mid-teens sequential revenue growth in Q3 and low double-digit growth for fiscal 2025 [10] - The AI server business has generated over $1.1 billion in net new order value and has a backlog of $3.2 billion in AI systems as of Q2 of fiscal 2025 [11] - The newly introduced ProLiant Gen 12 server platform enhances performance, security, and cooling technology, strengthening HPE's competitive position in the server market [12] Group 3: Partnerships and Collaborations - HPE is expanding its AI capabilities through partnerships with NVIDIA, Arista Networks, and Microsoft, enhancing its offerings in the AI market [13][14][15] - Collaborations with these companies are contributing positively to HPE's top line and market reach [15] Group 4: Financial Performance and Valuation - HPE's fiscal 2025 earnings estimate has been revised upward to $1.91, reflecting positive market sentiment [16] - HPE trades at a forward price-to-sales ratio of 0.81, significantly below the industry's 3.59, indicating a discounted valuation [19] - The current Zacks Rank for HPE is 2 (Buy), suggesting a favorable investment opportunity [21]