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Investors are cheering Hewlett Packard Enterprise (HPE) this morning after the AI server specialist posted record financials for its Q2 and issued upbeat guidance for the full year.
Including post-earnings gains, HPE stock is up a remarkable 180% versus its year-to-date low, but Ananda Baruah, a senior Loop Capital analyst, believes it’s not out of room to run just yet.
On Tuesday, he upgraded Hewlett Packard Enterprise to “Buy” and raised the price target to $75, signaling potential upside of another 37% from current levels.
Why Is Loop Capital Bullish on HPE Stock?
In its recently concluded quarter, Hewlett Packard Enterprise earned $0.79 on a per-share basis and generated $10.68 billion in revenue, both handily above Street estimates.
Citing AI-driven networking demand, the company raised its full-year guidance for revenue growth as well to at least 29%, which formed the basis of Loop Capital’s bullish call on HPE shares.
According to Ananda Baruah, “Agentic and Inferencing adoption” is helping drive both sales and margin upside for HPE; the firm’s gross margin (adjusted) increased by 750 bps year-over-year to 36.9%.
A 1.03% dividend yield on Hewlett Packard shares makes them even more attractive for income-focused investors.
Hewlett Packard Shares Are Attractively Priced
Baruah is convinced that “commercial inference investment” is currently in its early innings only, offering HPE’s server business a three-to-five year runway for sustained, AI-driven growth.
He also expects the company’s recent Juniper Networks acquisition to supercharge its networking scale and deepen its exposure to AI‑driven data‑center spend.
What’s also worth mentioning is that HPE shares are trading at about 22x forward earnings at the time of writing. So they’re much cheaper to own than Dell (DELL) at nearly 35x.
Barchart also currently holds a “100% Buy” opinion on Hewlett Packard Enterprise, reinforcing that the technical momentum favors continued upside ahead.
What’s the Consensus Rating on Hewlett Packard?
Heading into Tuesday, Wall Street analysts had a consensus “Moderate Buy” rating on Hewlett Packard stock, with price targets going as high as $40.
However, it’s reasonable to expect upward revisions in the days ahead now that HPE has posted a blockbuster Q2 and issued impressive future guidance.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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