HPE stock has surged YTD, but challenges in some divisions may impact future performance.

From Nasdaq: 2024-12-09 11:56:00

Hewlett Packard Enterprise (HPE) has seen a 41.1% YTD surge, outperforming the Computer – Integrated Systems industry. Despite a lower P/E ratio, financial results suggest selling the stock may be wise. HPE’s rally is driven by GreenLake and AI systems, with significant growth in both segments.

HPE is experiencing strong demand for AI systems, with $6.7 billion in cumulative orders. However, the 41% YTD gain may already reflect this growth. Challenges in the Intelligent Edge division and lower financial services growth are impacting HPE’s gross margin and overall performance.

Higher interest rates and global economic challenges are affecting HPE’s outlook. The Zacks Consensus Estimate for fiscal 2025 and 2026 does not show a strong financial recovery for the company. Given these challenges, investors may consider selling HPE stock to lock in gains.

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Read more at Nasdaq: HPE Trading at Low P/E Multiple: Time to Buy, Hold or Sell the Stock?