Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced and qualified news journalists who produce independent content [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The content delivered includes insights across various sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for its forward-looking approach and enthusiastic adoption of technology to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Elliott Investment Management has quietly built a stake worth more than $1.5 billion in HewlettPackard Enterprise Co. (HPE), becoming one of the networking and software company’s top five shareholders, according to a Bloomberg report citing people familiar with the matter.The activist hedge fund, known for its aggressive shareholder campaigns in the tech sector, is expected to push for changes to enhance shareholder value at HPE, although its exact demands are not yet known, the report said. Both Elliott an ...

Group 1 - Shares of Hewlett Packard Enterprise (HPE) increased nearly 5% following Elliott Investment Management's acquisition of a stake exceeding $1.5 billion in the company [1] - Elliott Investment Management aims to engage HPE in discussions to enhance shareholder value [1] - HPE's stock has declined by more than 25% in value this year [2] Group 2 - HPE exceeded quarterly revenue expectations last month but provided weak guidance for the full fiscal year [2] - The company is facing challenges with higher discounting and anticipates that price adjustments will negatively impact its top-line growth [2]

Core Insights - The AI infrastructure market is expected to exceed $200 billion in spending by 2028, with both Dell Technologies and Hewlett Packard Enterprise well-positioned to benefit from this growth opportunity [2] Dell Technologies - Dell Technologies is experiencing strong demand for its AI-optimized servers, particularly the PowerEdge XE9680L, driven by digital transformation and interest in generative AI applications [3] - In Q4 of fiscal 2025, Dell's AI-optimized server orders increased by $1.7 billion, with shipments totaling $2.1 billion and a backlog of $4.1 billion [5] - Dell's partnership with companies like NVIDIA and Microsoft is expanding, enhancing its AI capabilities and enterprise AI adoption [6] - Dell's shares are trading at a forward Price/Sales ratio of 0.5X, indicating a relatively low valuation [13] - The Zacks Consensus Estimate for Dell's fiscal 2026 earnings is $9.34 per share, reflecting a 14.74% year-over-year increase [15] Hewlett Packard Enterprise - Hewlett Packard is also benefiting from strong demand for its AI-optimized servers, with its server business growing 30% year-over-year to $4.3 billion in Q1 of fiscal 2025 [7] - The launch of HPE's ProLiant Gen 12 server platform is expected to improve performance and energy efficiency, potentially replacing multiple older server generations and reducing power consumption by at least 65% [8] - HPE's GreenLake cloud product has achieved significant growth, with annual recurring revenue surpassing $2 billion, a 46% increase year-over-year [9] - HPE's shares are trading at a forward Price/Sales ratio of 0.52X, slightly higher than Dell's [13] - The Zacks Consensus Estimate for HPE's fiscal 2025 earnings is $1.94 per share, indicating a 2.51% decline year-over-year [15] Stock Performance - Year-to-date, Dell's shares have decreased by 34.9%, while HPE's shares have dropped by 37.6%, largely due to broader market weaknesses and rising trade tensions [10] - Dell holds a Zacks Rank of 3 (Hold), making it a stronger pick compared to HPE, which has a Zacks Rank of 4 (Sell) [17]

Core Viewpoint - Hewlett Packard Enterprise (HPE) has experienced a significant decline in stock price, losing 36.1% over the past three months, which is notably worse than the declines seen in the Zacks Computer - Integrated Systems industry, Zacks Computer and Technology sector, and the S&P 500 index [1][4]. Group 1: Stock Performance and Market Conditions - HPE's stock underperformance is attributed to broader market weakness and deteriorating investor sentiment due to rising trade tensions and fears of escalating costs from additional tariffs [4][5]. - The company's manufacturing facilities are concentrated in countries like China and Mexico, which have been impacted by tariffs imposed by the Trump administration, leading to increased component costs and margin pressure [5]. Group 2: Earnings and Financial Performance - HPE missed its fiscal first-quarter earnings expectations due to unexpected pricing pressures from aggressive discounting on traditional servers and a normalization of post-pandemic backlog orders in its high-margin Intelligent Edge division [6]. - In fiscal 2024, HPE reported an increase of $135 million in charges related to acquisitions, primarily due to costs associated with the pending acquisition of Juniper Networks, which is expected to undermine HPE's earnings performance [11]. Group 3: Regulatory Challenges - The U.S. Department of Justice (DOJ) has raised concerns regarding HPE's acquisition of Juniper Networks, filing a lawsuit to block the merger on the grounds that it may eliminate competition and stifle innovation in the networking market [10]. - The networking market is currently dominated by a few key players, including HPE, Juniper Networks, Arista Networks, and Cisco, which adds to the competitive pressures faced by HPE [7][8]. Group 4: Investment Recommendation - Given the challenges related to rising costs from tariffs and regulatory hurdles in the acquisition of Juniper Networks, it is suggested that investors consider selling HPE stock at this time [12].

Group 1 - Hewlett Packard Enterprise (HPE) is a company that split from HP in 2015 and has been focusing on servers and data storage since then [1] - The company has been actively pursuing its development path and aims to provide tailored investment solutions [1] - HPE's strategic focus includes high-growth technology equities, undervalued blue-chip stocks, and niche market opportunities [1]

Hewlett Packard Enterprise Co. HPE investors have a technical red flag flashing—the dreaded Death Cross. The stock has tumbled 23.24% year-to-date and 18.78% in the past month, and now, a bearish crossover of the 50-day and 200-day simple moving averages suggests more downside could be ahead.While HPE's AI collaboration with Nvidia Corp NVDA is generating buzz, the technicals tell a different story.Read Also: Nvidia Stock Climbs As AI, Tariff News Spark Buying InterestHPE Stock: A Strongly Bearish Trend Cha ...

Hewlett Packard Enterprise (HPE) reported first-quarter fiscal 2025 non-GAAP earnings of 49 cents per share, which missed the Zacks Consensus Estimate by 2%. The figure rose 2% year over year.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.HPE’s revenues increased 16.3% year over year to $7.85 billion and surpassed the Zacks Consensus Estimate by 0.55%. The top line grew on the back of Server, Hybrid Cloud and Financial services segments, driven by increased sales in artificial intell ...

Financial Performance - For the three months ended January 31, 2025, GAAP net revenue was $7.854 billion, an increase from $6.755 billion in the same period of fiscal 2024, representing a growth of approximately 16.2%[266]. - GAAP gross profit for the same period was $2.295 billion, with a gross profit margin of 29.2%, down from $2.457 billion and 36.4% in fiscal 2024[266]. - The company reported a free cash flow of negative $877 million for the three months ended January 31, 2025, compared to negative $482 million for the same period in 2024[243]. - Free cash flow (FCF) decreased to $(877) million for the three months ended January 31, 2025, compared to $(482) million in the same period of fiscal 2024[273]. - Non-GAAP net earnings attributable to HPE exclude certain charges, including those related to equity interests and taxes, to provide a clearer view of operational performance[283]. Cash Flow and Liquidity - For the three months ended January 31, 2025, net cash used in operating activities increased by $0.5 billion compared to the same period in fiscal 2024, primarily due to unfavorable changes in other assets and liabilities[244]. - The company expects internally generated cash flows to be generally sufficient to support operating businesses and capital expenditures for at least the next twelve months[233]. - The company anticipates that funds from operations and access to capital markets will meet liquidity requirements for the foreseeable future[233]. - As of January 31, 2025, cash, cash equivalents, and restricted cash totaled $13.852 billion, while total debt was $17.877 billion[240]. - The cash conversion cycle increased to 5 days as of January 31, 2025, compared to a negative 12 days as of October 31, 2024[245]. Investments and Divestitures - The company completed the divestiture of its CTG business to HCLTech on December 1, 2024, receiving net proceeds of $210 million and recognizing a gain of $244 million[238]. - The company divested 30% of H3C's total issued share capital on September 4, 2024, receiving $2.1 billion in pre-tax consideration, which is expected to result in annualized cost savings of approximately $120 million[282]. - The company incurred a gain of $244 million from the sale of CTG on December 1, 2024, which is considered a discrete event for non-GAAP calculations[283]. - Future cash payments of approximately $159 million are expected in connection with approved restructuring plans, with $47 million to be paid through the remainder of fiscal 2025[260]. Debt and Financing Activities - The company issued $9.0 billion of senior unsecured notes and $1.5 billion of Preferred Stock in September 2024 to fund a portion of the acquisition of Juniper Networks[239]. - Net cash used in financing activities increased by $0.9 billion to $0.8 billion for the same period, primarily due to lower proceeds from debt[251]. - The company maintains a revolving credit facility and two commercial paper programs, with no changes since October 31, 2024[254]. Operational Metrics - Days of sales outstanding (DSO) increased to 40 days as of January 31, 2025, compared to 38 days as of October 31, 2024[245]. - DSO (Days Sales Outstanding) decreased due to higher early collections, while DOS (Days of Sales) increased due to higher inventory levels from strategic purchases for AI systems[246][247]. Cost Management - The company anticipates making contributions of approximately $143 million to non-U.S. pension plans for the remainder of fiscal 2025[259]. - The projected non-GAAP income tax rate for fiscal 2025 is set at 15%, consistent with the previous fiscal year, reflecting the company's tax structure and positions[289]. - The company expects future annualized cost savings of approximately $120 million following the H3C divestiture and related severance actions[282]. - Non-GAAP measures are used to supplement GAAP results, providing a clearer view of financial performance without the impact of non-cash expenses and discrete events[287].

Financial Data and Key Metrics Changes - The company reported Q1 revenue of $7.9 billion, representing a 17% year-over-year growth, marking the fourth consecutive quarter of accelerated revenue growth [36][38] - Non-GAAP diluted net earnings per share were 49 cents, consistent with the company's outlook range [41] - Non-GAAP gross margin was 29.4%, down 680 basis points year-over-year, primarily due to a higher mix of server revenue and lower contributions from Intelligent Edge [39] - Free cash flow was negative $877 million, in line with normal seasonal patterns [54] Business Line Data and Key Metrics Changes - Server revenue reached $4.3 billion, up 30% year-over-year, although it fell sequentially due to the timing of AI systems deals [42] - Intelligent Edge revenue was $1.1 billion, up 2% quarter-over-quarter but down 4% year-over-year [48] - Hybrid cloud revenue grew 11% year-over-year to $1.4 billion, although it declined 12% sequentially [50] - Financial services generated $873 million in revenue, up 2% year-over-year and flat quarter-over-quarter [53] Market Data and Key Metrics Changes - The company experienced double-digit year-over-year orders growth across all key geographies and products, including campus switching [20] - AI systems revenue was $900 million in Q1, up from about $400 million last year, but down sequentially as expected due to chip availability and customer readiness [44][24] - The AI systems backlog was $3.1 billion, up 29% quarter-over-quarter [22] Company Strategy and Development Direction - The company plans to reduce its employee base by 5% over the next twelve to eighteen months, targeting approximately 2,500 positions to better align its cost structure with its business mix and long-term strategy [16] - The company is committed to closing the Juniper acquisition, which is expected to deliver at least $450 million in gross annual run rate synergies to shareholders within three years [10] - The company aims to leverage its global supply chain to mitigate the impact of recent tariff policies [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that while Q1 performance met expectations, execution could have been better, particularly in the server segment [13][33] - The company expects continued pressure on server operating margins in the near term but anticipates improvements in the back half of fiscal 2025 [15][34] - Management expressed confidence in achieving revenue growth of 7% to 11% for fiscal 2025, with a significant portion weighted towards the second half [60] Other Important Information - The company is implementing cost-saving measures, targeting discretionary spending, and has reduced non-GAAP operating expenses to a record low of 19% of revenue [40] - The company expects to achieve at least $350 million in gross savings by fiscal 2027, with about 20% of the savings expected by the end of this year [57] Q&A Session Summary Question: How much of the operating profit dollar headwind is from tariff assumptions? - Management indicated that the guidance includes a seven cents impact from tariffs for the year, with four cents expected in Q2, primarily affecting the server business [91][92] Question: What gives confidence in revenue growth and operating margin expansion in the back half of the year? - Management highlighted three critical areas: improved server execution, mitigation of tariffs, and the impact of the cost efficiency program as drivers for profitability [122] Question: How is the customer mix changing? - Management noted a balanced approach targeting both service provider model builders and enterprise customers, with a focus on maintaining a solid pipeline and addressing the needs of various segments [110][112]