Hewlett Packard Enterprise Company (HPE): A Bull Case Theory

We came across a bullish thesis on Hewlett Packard Enterprise Company on CopyCat Invest’s Substack. In this article, we will summarize the bulls’ thesis on HPE. Hewlett Packard Enterprise Company's share was trading at $22.90 as of December 4th. HPE’s trailing and forward P/E were 26.19 and 9.43 respectively according to Yahoo Finance.

Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data seamlessly. HPE reported a solid fourth-quarter performance, with revenues rising 14% year-over-year to $9.68 billion, slightly below estimates of $9.9 billion, while EPS surpassed expectations at $0.62 versus $0.58, driven by stronger margins. Gross margin expanded significantly to 36.4% from 30.9%, and operating margin improved to 12.2% from 11.1%, reflecting disciplined cost management and operational efficiency.

Free cash flow was robust at $1.92 billion, comfortably above the $1.5 billion anticipated. Segment-wise, HPE’s Server business declined 4.8% to $4.46 billion, with operating margins moderating to 9.8% from 11.6%, while Networking generated $2.8 billion with a 23% operating margin, slightly below prior year. The Hybrid Cloud segment faced a 12.1% decline to $1.4 billion with 5% operating margins, reflecting ongoing investment and restructuring, whereas Financial Services remained resilient, contributing $889 million with a notable 11.5% operating margin, up from 9.2%.

Looking ahead, HPE provided first-quarter guidance of $9–9.4 billion in revenues and EPS of $0.57–0.61, slightly below consensus for revenue but above for EPS, reaffirming its full-year FY26 guidance with EPS now expected to rise modestly to $2.25–2.45, compared with prior guidance of $2.20–2.40.

The results underscore HPE’s disciplined execution across its portfolio, with margin expansion and strong cash flow providing financial flexibility. While some segments face near-term headwinds, the company’s balanced mix of enterprise infrastructure, hybrid cloud solutions, and financial services positions it well to navigate demand fluctuations, deliver shareholder value, and support ongoing strategic investments. Overall, HPE’s performance and outlook highlight operational resilience and a compelling risk/reward profile for investors.

Previously we covered a bullish thesis on Dell Technologies Inc. (DELL) by Magnus Ofstad in March 2025, which highlighted the company’s strong AI-driven server and storage growth, solid fiscal 2025 performance, and robust cash flow. The company's stock price has appreciated approximately by 51.96% since our coverage. The thesis still stands as DELL remains well-positioned in AI and cloud infrastructure. CopyCat Invest shares a similar perspective but emphasizes HPE’s margin expansion and balanced portfolio execution.

Hewlett Packard Enterprise Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held HPE at the end of the second quarter which was 45 in the previous quarter. While we acknowledge the risk and potential of HPE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HPE and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.