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HPE Launches 100% Fanless Direct Cooling: What Should Investors Do?
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Hewlett Packard Enterprise (HPE - Free Report) shares have gained 21.7% in the year-to-date (YTD) period, almost in line with the S&P 500’s return of 21.9%. Also, the stock’s YTD return has not been far behind the Zacks Computer - Integrated Systems industry and the broader tech sector. The industry and the Zacks Computer and Technology Sector have returned 23.4% and 25.5%, respectively.
Hewlett Packard Enterprise stock’s YTD price performance reflects the company’s sustained focus on expanding its product portfolio, which is contributing to the improvement in financial performance. Recently, HPE introduced the industry’s first 100% fanless direct liquid cooling systems architecture. The product is expected to optimize the energy and cost efficiency of large-scale artificial intelligence (AI) setups.
Cooling AI setups has been one of the main challenges alongside power optimization and processing speed acceleration. HPE’s liquid cooling technology solves this challenge through its eight-element cooling design. The eight-element cooling architecture covers graphics processing units, central processing units, full server blade, local storage, network fabric, rack/cabinet, pod/cluster and coolant distribution unit.
HPE has also included features like open system design to enable users to integrate accelerators per their choice, lending them flexibility. The company has also taken care of low-cost and low-power integration. HPE has also subjected this product to rigorous testing to ensure reliability and superior performance.
The latest fanless cooling system expands on HPE’s long list of product lines that the company has launched in 2024. The company also launched Wi-Fi 7 access points that ensure robust network security and enhanced location-based services this year. Other products include HPE Aruba Networking Enterprise Private 5G and HPE Private Cloud AI for improved networking. Hewlett Packard Enterprise also launched HPE ProLiant Compute XD685 to train complex AI models.
HPE is not only expanding its capabilities through product launches, it is also undertaking partnerships with industry leaders and acquisition of companies bringing in cutting-edge expertise.
Hewlett Packard Enterprise YTD Performance
Image Source: Zacks Investment Research
HPE Gains From Expanding Partner Base
HPE is expanding its AI expertise through partnerships with leading companies, including NVIDIA (NVDA - Free Report) and Microsoft (MSFT - Free Report) . These partnerships, along with HPE’s initiatives, have resulted in HPE’s double-digit sequential growth in AI systems orders and revenues.
Hewlett Packard Enterprise has been in partnership with NVIDIA while foraying into the AI market. Together, the two companies released NVIDIA AI Computing by HPE where they combined their expertise. HPE also combined NVIDIA NIM Agent Blueprints with HPE Private Cloud AI for multiple AI use cases. Furthermore, Hewlett Packard Enterprise and Microsoft collaborated to develop Azure Stack HCI systems that also include artificial intelligence-based solutions. These collaborations, along with HPE’s other AI initiatives, are adding to its top line.
In the third quarter of fiscal 2024, the company reported that it had $6.2 billion in cumulative orders for AI products and services since the first quarter of fiscal 2023. The quarterly revenues in the third quarter of fiscal 2024 from AI products and services were $1.3 billion and backlogs were $3.4 billion.
HPE Expands Through Acquisitions
Hewlett Packard Enterprise acquired Morpheus Data in 2024 and is in the process of acquiring Juniper Networks (JNPR - Free Report) . The acquisition of Morpheus Data is set to enable HPE GreenLake cloud to simplify IT complexity.
The acquisition of Juniper Networks will benefit HPE in two key ways. Firstly, Juniper, being a former competitor of HPE in the networking space, will lead to the further consolidation of the market while expanding HPE’s capabilities and market share brought in by the JNPR acquisition.
For the fourth quarter of fiscal 2024, HPE expects its revenues in the range of $8.1-$8.4 billion. The Zacks Consensus Estimate for the same is pegged at $8.27 billion, indicating year-over-year growth of 12.5%. This gives HPE a strong near-term outlook.
What Should Investors Do?
HPE is benefiting from the growing product line, expanding partner base and acquisitions. Its revenue outlook for fourth-quarter fiscal 2024 makes its near-term outlook strong.
Hewlett Packard Enterprise currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors. HPE stock appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
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HPE Launches 100% Fanless Direct Cooling: What Should Investors Do?
Hewlett Packard Enterprise (HPE - Free Report) shares have gained 21.7% in the year-to-date (YTD) period, almost in line with the S&P 500’s return of 21.9%. Also, the stock’s YTD return has not been far behind the Zacks Computer - Integrated Systems industry and the broader tech sector. The industry and the Zacks Computer and Technology Sector have returned 23.4% and 25.5%, respectively.
Hewlett Packard Enterprise stock’s YTD price performance reflects the company’s sustained focus on expanding its product portfolio, which is contributing to the improvement in financial performance. Recently, HPE introduced the industry’s first 100% fanless direct liquid cooling systems architecture. The product is expected to optimize the energy and cost efficiency of large-scale artificial intelligence (AI) setups.
Cooling AI setups has been one of the main challenges alongside power optimization and processing speed acceleration. HPE’s liquid cooling technology solves this challenge through its eight-element cooling design. The eight-element cooling architecture covers graphics processing units, central processing units, full server blade, local storage, network fabric, rack/cabinet, pod/cluster and coolant distribution unit.
HPE has also included features like open system design to enable users to integrate accelerators per their choice, lending them flexibility. The company has also taken care of low-cost and low-power integration. HPE has also subjected this product to rigorous testing to ensure reliability and superior performance.
The latest fanless cooling system expands on HPE’s long list of product lines that the company has launched in 2024. The company also launched Wi-Fi 7 access points that ensure robust network security and enhanced location-based services this year. Other products include HPE Aruba Networking Enterprise Private 5G and HPE Private Cloud AI for improved networking. Hewlett Packard Enterprise also launched HPE ProLiant Compute XD685 to train complex AI models.
HPE is not only expanding its capabilities through product launches, it is also undertaking partnerships with industry leaders and acquisition of companies bringing in cutting-edge expertise.
Hewlett Packard Enterprise YTD Performance
Image Source: Zacks Investment Research
HPE Gains From Expanding Partner Base
HPE is expanding its AI expertise through partnerships with leading companies, including NVIDIA (NVDA - Free Report) and Microsoft (MSFT - Free Report) . These partnerships, along with HPE’s initiatives, have resulted in HPE’s double-digit sequential growth in AI systems orders and revenues.
Hewlett Packard Enterprise has been in partnership with NVIDIA while foraying into the AI market. Together, the two companies released NVIDIA AI Computing by HPE where they combined their expertise. HPE also combined NVIDIA NIM Agent Blueprints with HPE Private Cloud AI for multiple AI use cases. Furthermore, Hewlett Packard Enterprise and Microsoft collaborated to develop Azure Stack HCI systems that also include artificial intelligence-based solutions. These collaborations, along with HPE’s other AI initiatives, are adding to its top line.
In the third quarter of fiscal 2024, the company reported that it had $6.2 billion in cumulative orders for AI products and services since the first quarter of fiscal 2023. The quarterly revenues in the third quarter of fiscal 2024 from AI products and services were $1.3 billion and backlogs were $3.4 billion.
HPE Expands Through Acquisitions
Hewlett Packard Enterprise acquired Morpheus Data in 2024 and is in the process of acquiring Juniper Networks (JNPR - Free Report) . The acquisition of Morpheus Data is set to enable HPE GreenLake cloud to simplify IT complexity.
The acquisition of Juniper Networks will benefit HPE in two key ways. Firstly, Juniper, being a former competitor of HPE in the networking space, will lead to the further consolidation of the market while expanding HPE’s capabilities and market share brought in by the JNPR acquisition.
For the fourth quarter of fiscal 2024, HPE expects its revenues in the range of $8.1-$8.4 billion. The Zacks Consensus Estimate for the same is pegged at $8.27 billion, indicating year-over-year growth of 12.5%. This gives HPE a strong near-term outlook.
What Should Investors Do?
HPE is benefiting from the growing product line, expanding partner base and acquisitions. Its revenue outlook for fourth-quarter fiscal 2024 makes its near-term outlook strong.
Hewlett Packard Enterprise currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors. HPE stock appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.