Hewlett Packard Enterprise (HPE) shares popped after the company’s better-than-expected fiscal fourth-quarter results drew price target bumps from analysts.
Stifel reiterated its buy rating for the server maker and upgraded its price target to $25 from $22, calling the company’s shares “undervalued” amid “strong demand for [artificial intelligence (AI)] servers and signs of a recovery in traditional servers.”
Morgan Stanley upgraded HP Enterprise to “overweight” from “equal weight” and raised its price target to $28 from $23. The firm noted that HP Enterprise outperformed its results from last quarter “driven by AI servers.” AI server revenue was in line with expectations at $1.5 billion.
In its fiscal fourth quarter, HP Enterprise posted record revenue of $8.5 billion, up 15% year-over-year and above the analyst consensus compiled by Visible Alpha. Net income was $1.34 billion, or 99 cents per share, up from $642 million, or 49 cents per share, a year earlier.
HP Enterprise server revenue jumped 32% to $4.7 billion, above analysts’ estimates. In October, the company unveiled new servers powered by Advanced Micro Devices (AMD) chips and designed to support AI clusters for tasks like training large language models.
Shares of HP Enterprise rose more than 10% to $24.01 intraday Friday and have gained more than 40% in 2024.
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