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Key Takeaways
- Hewlett Packard Enterprise was upgraded by Bank of America, which said the firm had several future catalysts.
- The bank also raised the price target to $24 from $21.
- The analysts pointed to HPE’s position in the artificial intelligence market and likely cost cuts.
Hewlett Packard Enterprise (HPE) shares surged Tuesday after Bank of America upgraded the stock, saying the tech firm has “many catalysts ahead,” including benefits from need for more artificial intelligence (AI) products.
The bank raised its rating to “buy” from “neutral,” and lifted the price target to $24 from $21.
Analysts wrote in a note to clients that because of its “decades of expertise in liquid cooling (CRAY systems) and increased adoption of supercomputing, HPE will be able to command a key position in AI adoption” for large organizations and governments.
BofA Believes HPE Will Make Significant Cost Cuts Under New CFO
Bank of America also believes that the company will make significant cost cuts under the leadership of new Chief Financial Officer (CFO) Marie Myers, and will see revenue and increased cost synergies with its planned purchase of Juniper Networks (JNPR). HPE announced the $14 billion acquisition of Juniper last January.
Other positives cited by the analysts were the “cyclical recovery across servers, storage, and particularly networking,” and profit margin recovery for high performance computing.
Shares of Hewlett Packard Enterprise, which entered Tuesday up just 1.5% on the year, rose 5% to $18.09 in early afternoon trading.