HPE Inc. (HPE.US) hosts first AI Day, Wall Street reaction lukewarm

Hewlett Packard Enterprise (HPE.US) hosted its first ever AI Day on Thursday, promoting its fanless direct liquid cooling system and new servers with the latest AMD (AMD.US) processors. Despite the hype leading up to the event, investors and analysts were underwhelmed.

Seeking Alpha analyst Michael Del Monte said: "Management said the fanless architecture can reduce data center cooling costs by 90%, as the cooling tubes cover all aspects of the server racks, including GPUs, CPUs, server blades, local storage, and networking structures."

Del Monte said: "In essence, HPE is positioning itself to provide plug-and-play server racks that will fully support the compute needs of AI testing and inference, whether hosted internally or in HPE Green Lake."

Susquehanna rates HPE "Neutral" with a price target of $20.

Susquehanna analyst Mehdi Hosseini was more bullish, calling HPE's liquid cooling assets "impressive" and saying they should help boost the company's performance.

Hosseini said: "We were impressed by the assets HPE carefully packaged and showcased at AI Day, which could make HPE a key partner for AI manufacturing and solutions providers, though actual contributions may not come for at least a year and won't be discussed at the event."

Citi also rates HPE "Neutral" with a price target of $20.

Citi analyst Asiya Merchant said the "scale" of HPE's direct liquid cooling capacity impressed her.

Merchant said: "We believe the industry's adoption of direct liquid cooling (versus air cooling) and the ability to grow its AI market share will be key metrics for investors to measure HPE's success. We believe air cooling will still be over 50% of the total potential AI market by 2027."

Seeking Alpha analyst Dan Victor called the event a "good opportunity" to update the market on the company's current situation ahead of its quarterly earnings, due at the end of the month.

As of writing, HPE was up 0.75% to $20.695.