In its latest quarterly report, HPE disclosed a doubling of revenues from AI servers, reaching $900 million—a figure that surpassed market expectations. This impressive growth is backed by a substantial order backlog of over $3 billion, underscoring strong demand for HPE’s AI solutions. This surge is a clear indicator of the increasing reliance on AI-driven technologies across various industries.
What sets HPE apart from its competitors, such as Dell Technologies (NYSE:), is its leadership in the supercomputer market. HPE currently boasts four of the world’s ten fastest supercomputers, showcasing its technological prowess and capacity to handle the most demanding computational tasks. These high-performance computing (HPC) systems are critical for advanced AI applications, from scientific research to complex simulations.
Moreover, HPE’s strategic $14 billion acquisition of Juniper Networks (NYSE:) is a game-changer. This move will significantly bolster HPE’s networking capabilities, making it a more formidable player in the AI infrastructure market. Analysts are optimistic about this acquisition, projecting HPE’s revenue to reach nearly $30 billion in 2024, driven by enhanced capabilities and market presence.
Despite its strong performance and strategic positioning, HPE’s stock remains undervalued compared to its peers. This valuation discrepancy presents a compelling investment opportunity, especially given the company’s projected revenue growth in AI and HPC segments—30% in 2024 and 41% in 2025.
