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Should You Buy, Sell or Hold HPE Stock After a 14.3% Rise YTD?
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Key Takeaways
HPE shares have risen 14.3% YTD but lag the industry's 61.9% growth.
HPE's hybrid cloud grew 14.2% YoY, while its new Networking unit surged 54.3%.
Partnerships with NVIDIA, Arista and Microsoft strengthen HPE's AI and cloud reach.
Hewlett Packard Enterprise (HPE - Free Report) has gained 14.3% in the year-to-date period. However, HPE has underperformed the Zacks Computer - Integrated Systems industry’s return of 61.9% in the same time frame, raising the question: Should investors accumulate HPE shares or book profits and exit the investment?
HPE YTD Performance Chart
Image Source: Zacks Investment Research
Despite a 14.3% rise in the year-to-date period, HPE trades at a discount. From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 0.81, below the industry’s 3.59. The discounted valuation is also reflected by the Zacks Value Score of B. Given these valuation factors, let us now look at the performance metrics of this stock.
HPE Forward 12 Months (P/S) Chart
Image Source: Zacks Investment Research
HPE Benefits From Growth of Cloud and Networking Business
Hewlett Packard is experiencing massive traction in its cloud offerings, which is reflected in the growth rate of its Hybrid Cloud segment. HPE’s Hybrid Cloud segment is experiencing growth on the back of Alletra MP adoption, GreenLake cloud platform expansion and enterprise AI use cases based on private cloud AI. The Hybrid Cloud segment grew 14.2% year over year in the third quarter of fiscal 2025.
Per its earnings call report, HPE was able to ship more than 5,000 Alletra MP arrays in 2025 and achieved triple-digit revenue growth. The company’s GreenLake cloud product is also experiencing rapid adoption. In the third quarter of fiscal 2025, HPE was able to add 2,000 new users, amassing a total number of 44,000 customers for its GreenLake cloud.
Hewlett Packard’s networking business, which mainly included wired and wireless local area networks, data center switching, software-defined wide-area-networks, cellular network software, network security and the HPE Aruba Networking product portfolio, was accounted under the Intelligent Edge segment until the acquisition of Juniper Networks.
The recent acquisition of Juniper Networks on July 2, 2025, not only deepened its networking portfolio with new capabilities like cloud-native and AI-driven networks, but it also ramped up the new Networking segment’s revenues by 54.3% to $1.73 billion in the third quarter of fiscal 2025, while the Intelligent Edge business revenues grew 11% year over year.
HPE Gains From Expanding Partner Base
HPE is expanding its AI expertise through partnerships with leading companies, including NVIDIA (NVDA - Free Report) , Arista Networks (ANET - Free Report) and Microsoft (MSFT - Free Report) . HPE and Arista Networks have been longstanding partners, with HPE benefiting from Arista’s stronger datacenter networking offering.
Hewlett Packard 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 and Microsoft collaborated to develop Azure Stack HCI systems that also include Artificial Intelligence-based solutions. These collaborations with Arista, NVIDIA and Microsoft, along with HPE’s other AI initiatives, are adding to its top line.
HPE’s top and bottom lines are benefiting from its strong cloud and server offerings, while its partner base is filling the gap, allowing it to foray into newer markets. The Zacks Consensus Estimate for HPE’s fiscal 2025 earnings is pegged at $1.90 per share, which has been revised upward three cents in the past seven days. However, the company is also facing some challenges.
Image Source: Zacks Investment Research
Key Challenges Faced by HPE
Hewlett Packard's near-term prospects might be hurt by softening IT spending. Higher interest rates and inflationary pressures are hurting consumer spending. On the other hand, enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues.
Hewlett Packard's market share and revenues necessarily depend on client relationships and the number of contracts it secures. This, along with the limited scope for product differentiation, makes the renegotiation of large contracts extremely important.
Competition from bigger companies is a major concern. Hewlett Packard has to deal with strong competition in each of its business segments on the basis of technology, innovation, price, quality, reliability, etc. The company’s business units are pitted against IBM, Dell, Cisco and Microsoft.
Conclusion: Hold HPE Stock Now
HPE is benefiting from strong growth in the networking and cloud space. Its discounted price gives investors an opportunity to buy this stock. However, challenges like softening IT spending, higher interest rates and inflationary pressures are a concern for the investors.
Image: HPE Newsroom
Should You Buy, Sell or Hold HPE Stock After a 14.3% Rise YTD?
Key Takeaways
Hewlett Packard Enterprise (HPE - Free Report) has gained 14.3% in the year-to-date period. However, HPE has underperformed the Zacks Computer - Integrated Systems industry’s return of 61.9% in the same time frame, raising the question: Should investors accumulate HPE shares or book profits and exit the investment?
HPE YTD Performance Chart
Image Source: Zacks Investment Research
Despite a 14.3% rise in the year-to-date period, HPE trades at a discount. From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 0.81, below the industry’s 3.59. The discounted valuation is also reflected by the Zacks Value Score of B. Given these valuation factors, let us now look at the performance metrics of this stock.
HPE Forward 12 Months (P/S) Chart
Image Source: Zacks Investment Research
HPE Benefits From Growth of Cloud and Networking Business
Hewlett Packard is experiencing massive traction in its cloud offerings, which is reflected in the growth rate of its Hybrid Cloud segment. HPE’s Hybrid Cloud segment is experiencing growth on the back of Alletra MP adoption, GreenLake cloud platform expansion and enterprise AI use cases based on private cloud AI. The Hybrid Cloud segment grew 14.2% year over year in the third quarter of fiscal 2025.
Per its earnings call report, HPE was able to ship more than 5,000 Alletra MP arrays in 2025 and achieved triple-digit revenue growth. The company’s GreenLake cloud product is also experiencing rapid adoption. In the third quarter of fiscal 2025, HPE was able to add 2,000 new users, amassing a total number of 44,000 customers for its GreenLake cloud.
Hewlett Packard’s networking business, which mainly included wired and wireless local area networks, data center switching, software-defined wide-area-networks, cellular network software, network security and the HPE Aruba Networking product portfolio, was accounted under the Intelligent Edge segment until the acquisition of Juniper Networks.
The recent acquisition of Juniper Networks on July 2, 2025, not only deepened its networking portfolio with new capabilities like cloud-native and AI-driven networks, but it also ramped up the new Networking segment’s revenues by 54.3% to $1.73 billion in the third quarter of fiscal 2025, while the Intelligent Edge business revenues grew 11% year over year.
HPE Gains From Expanding Partner Base
HPE is expanding its AI expertise through partnerships with leading companies, including NVIDIA (NVDA - Free Report) , Arista Networks (ANET - Free Report) and Microsoft (MSFT - Free Report) . HPE and Arista Networks have been longstanding partners, with HPE benefiting from Arista’s stronger datacenter networking offering.
Hewlett Packard 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 and Microsoft collaborated to develop Azure Stack HCI systems that also include Artificial Intelligence-based solutions. These collaborations with Arista, NVIDIA and Microsoft, along with HPE’s other AI initiatives, are adding to its top line.
HPE’s top and bottom lines are benefiting from its strong cloud and server offerings, while its partner base is filling the gap, allowing it to foray into newer markets. The Zacks Consensus Estimate for HPE’s fiscal 2025 earnings is pegged at $1.90 per share, which has been revised upward three cents in the past seven days. However, the company is also facing some challenges.
Image Source: Zacks Investment Research
Key Challenges Faced by HPE
Hewlett Packard's near-term prospects might be hurt by softening IT spending. Higher interest rates and inflationary pressures are hurting consumer spending. On the other hand, enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues.
Hewlett Packard's market share and revenues necessarily depend on client relationships and the number of contracts it secures. This, along with the limited scope for product differentiation, makes the renegotiation of large contracts extremely important.
Competition from bigger companies is a major concern. Hewlett Packard has to deal with strong competition in each of its business segments on the basis of technology, innovation, price, quality, reliability, etc. The company’s business units are pitted against IBM, Dell, Cisco and Microsoft.
Conclusion: Hold HPE Stock Now
HPE is benefiting from strong growth in the networking and cloud space. Its discounted price gives investors an opportunity to buy this stock. However, challenges like softening IT spending, higher interest rates and inflationary pressures are a concern for the investors.
HPE carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.