Morgan Stanley Upgrades HPE to Overweight, Sees Growth Potential

Hewlett Packard Enterprise Co. (HPE) has received an optimistic upgrade from Morgan Stanley, which believes the company is undervalued following its recent acquisition of Juniper Networks Inc. On Thursday, the financial firm raised HPE’s rating to ‘Overweight’ from ‘Equal Weight’ and increased its price target to $28, up from $22. This adjustment highlights Morgan Stanley’s confidence in HPE’s potential within the growing demand for artificial intelligence and its strategic acquisition moves.

According to a report by TheFly, Morgan Stanley asserts that the market has not fully accounted for the potential earnings benefits stemming from HPE’s acquisition of Juniper Networks, a significant player in AI-driven networking solutions. The firm estimates that if HPE were valued similarly to its peers, shares could reach as high as $39 in an optimistic scenario. This analysis follows HPE’s substantial $14 billion purchase of Juniper, which represents a strategic pivot towards hybrid cloud and AI solutions.

HPE’s stock saw a rise of over 3% on Thursday following the announcement. Retail sentiment on Stocktwits has remained largely neutral, although message volume increased from normal to high levels within 24 hours. Some users have described the stock as “super cheap” and labeled it a “value play in the tech sector,” reflecting a growing interest in HPE’s market position.

Positive Outlook for HPE’s Q3 Earnings

Morgan Stanley projects a robust performance for HPE in the upcoming third quarter (Q3), driven by broader market strength in enterprise hardware. The firm anticipates that demand for AI-related infrastructure, along with solid PC sales in the previous quarter, will lead to an earnings beat. HPE is scheduled to release its Q3 earnings report on September 3, 2025, with expectations of revenue ranging from $8.2 billion to $8.5 billion, compared to an estimate of $8.87 billion. The company also forecasts an adjusted earnings per share (EPS) between $0.40 and $0.45, slightly above the estimate of $0.41.

HPE has seen a gain of 0.8% in its stock price this year and an impressive over 13% increase over the past twelve months. As the company positions itself strategically in the evolving tech landscape, investor confidence appears to be strengthening, making it a noteworthy player in the technology sector.