We recently published a list of 10 Trending AI Stocks to Watch for the Rest of 2024. Since Hewlett Packard Enterprise Co (NYSE:HPE) ranks 9th on the list, it deserves a deeper look.
Chris Hyzy, Merrill & Bank of America Private Bank chief investment officer, said while talking to CNBC in a latest program that there is “ a lot of momentum” behind the market rally. The analyst said that to gauge how much momentum we have behind the optimism, we need to analyze the “wedge” in the market.
“The biggest wedge that was in the market last year and in 2022 was inflation. That’s beginning to go away. It’s almost to the fact that no one’s is talking about whether or not we are going to have inflation that’s worrisome.”
Hyzy said that the Fed easing its fiscal policy and now China “joining the party” will be two key tailwinds for the market.
Answering a question about the hard landing vs soft landing debate, the analyst said we should look beyond the two possibilities as he believes there are many other scenarios to consider in between these two outcomes.
“We have a lot of components of a soft landing. I’d like to say it’s more of a mid-cycle slowdown with easier financial conditions that should actually create a profit revision to the upside not downside,” Hyzy added.
For this article we picked top 10 trending AI stocks on the back of latest news and analyst ratings. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Hewlett Packard Enterprise Co (NYSE:HPE)
Number of Hedge Fund Investors: 58
Barclays recently upgraded Hewlett Packard Enterprise Co (NYSE:HPE) citing a potential recovery in the enterprise market. Analyst Tim Long expressed confidence in HPE’s growth, particularly in AI server revenues and storage, boosted by the recent JNPR deal. He emphasized that Hewlett Packard Enterprise Co (NYSE:HPE) offers a unique opportunity for investors as it doesn’t carry the same AI premium seen with other hardware companies. Long raised his rating from Equal Weight to Overweight and increased the price target from $20 to $24.
Long highlighted that Hewlett Packard Enterprise Co (NYSE:HPE) may have slightly higher gross margins on AI servers than its competitors, despite being less proactive in this area, which has kept its stock from rising as much as other “AI plays.” Nevertheless, he noted that HPE is ramping up orders and revenue in AI, with a notable increase in AI server sales last quarter.
“We are seeing early signs of an enterprise recovery and believe HPE is one of the best ways to invest in this emerging trend since the stock lacks an AI premium vs. other hardware names.”
Overall, Hewlett Packard Enterprise Co (NYSE:HPE) ranks 9th on Insider Monkey’s list titled 10 Trending AI Stocks to Watch for the Rest of 2024. While we acknowledge the potential of Hewlett Packard Enterprise Co (NYSE:HPE), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HPE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
