Hewlett Packard Enterprise (HPE): Evaluating Valuation After AI Technology Agreement With Nokia

Hewlett Packard Enterprise (HPE) is attracting fresh attention after reaching a global technology agreement with Nokia. This partnership brings HPE’s AI-driven assets into advanced telecommunications automation. This development emphasizes HPE’s strategic positioning in next-generation AI infrastructure.

See our latest analysis for Hewlett Packard Enterprise.

Momentum has built steadily for Hewlett Packard Enterprise this year, with excitement from its new Nokia partnership following a record run. HPE’s shares just hit an all-time high before a recent dip to $24.40. The one-year total shareholder return stands at a strong 21.3%, and long-term holders have seen remarkable gains, with a 199.6% total shareholder return over five years. This underscores both the enduring confidence and the growth narrative for the company.

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But with its shares retreating slightly after a surge and strong results already celebrated, is there still value left for new investors, or has the market fully priced in HPE's future AI potential?

Most Popular Narrative: 5.5% Undervalued

The dominant narrative places Hewlett Packard Enterprise’s fair value at $25.82, which stands modestly above its recent close of $24.40. This view pins upside potential on the successful integration of new assets and efficiency improvements, reinforcing optimism for forward growth.

Strategic acquisitions and expansion in high-growth technologies, including the integration of Juniper, launches of next-gen Gen12 servers, and AI-driven management platforms, are enhancing HPE's competitive positioning in edge, networking, and AI. These efforts are laying the groundwork for continued share gains and outsized revenue growth relative to traditional industry averages.

Read the complete narrative.

Curious about the numbers behind this optimism? The narrative’s fair value relies on ambitious upgrades to profit margins, rising recurring revenues, and a bold target for future profits. Find out which assumptions make the math add up.

Result: Fair Value of $25.82 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent challenges such as integrating Juniper and vulnerabilities in legacy hardware may limit margin expansion and disrupt Hewlett Packard Enterprise’s expected growth trajectory.

Find out about the key risks to this Hewlett Packard Enterprise narrative.

Build Your Own Hewlett Packard Enterprise Narrative

If these conclusions spark debate or you want to dig into the details yourself, you can generate your own investment story in just a few minutes. Do it your way

A great starting point for your Hewlett Packard Enterprise research is our analysis highlighting 2 key rewards and 5 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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