Hewlett Packard Enterprise HPE recently announced the acquisition of software provider — Determined AI — for an undisclosed amount. The acquisition is expected to boost Hewlett Packard’s portfolio of AI and high-performance computing (HPC) solutions by enabling machine learning (ML) professionals to implement ML models seamlessly to generate more precise insights from data.
Hewlett Packard Enterprise views Artificial Intelligence (AI), Industrial Internet of Things (IoT), and distributed computing as the next major markets. With the growing proliferation of AI across various industries, the need for specialized computing is growing. Notably, the accelerated AI server market is key in providing targeted capabilities for image and data-intensive training.
Hewlett Packard Enterprise Company Price and Consensus
Hewlett Packard Enterprise Company price-consensus-chart | Hewlett Packard Enterprise Company Quote
Markedly, Hewlett Packard, in its press release, mentioned that IDC expects the accelerated AI server market to grow 38% each year and reach $18 billion by 2024.
Moreover, HPC is proving to be instrumental in training and optimizing AI models. Notably, per Intersect360 Research, the HPC market is expected to exceed 40% growth, reaching approximately $55 billion in revenues by 2024.
Additionally, Hewlett Packard’s affordable HPC and AI solutions through HPE GreenLake cloud services for High Performance Computing (HPC) are also gaining steam.
The company has been pursuing acquisitions to focus more on high-margin hybrid IT models that leverage on-premises and cloud-computing power. Last year’s acquisition of Silver Peak has strengthened the company’s Aruba Edge Services platform.
Moreover, the acquisitions of Cray and MapR in 2019 strengthened its capabilities in high-performance computing and data analytics platforms. In 2018, Hewlett Packard had acquired five businesses, mainly to expand its footprint in the hybrid IT models.
We believe that the company’s focus on the hybrid IT model will drive growth in the long run. Some other notable acquisitions by Hewlett Packard in the hybrid IT space are SimpliVity and Cloud Technology Partners.
Zacks Rank & Stocks to Consider
Hewlett Packard currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Silicon Motion Technology Corporation SIMO, Digital Turbine, Inc. APPS and Zoom Video Communications ZM, all sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Silicon Motion, Digital Turbine and Zoom is currently pegged at 8%, 50% and 15.6%, respectively.
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