Hewlett Packard Enterprise (HPE) Stock: A Sustainable Turnaround in Enterprise Tech?

A line chart illustrating HPE's stock price movement from January 2025 to September 2025, highlighting a 10% upward trend in the past month, alongside a bar graph comparing its EV/EBITDA ratio to peers like IBM, Seagate, and TD SYNNEX.

Data query for generating a chart: Plot HPE's 52-week stock price range ($11.97–$24.66) against its recent closing price of $25.16, overlaying analyst price targets ($18–$30) and key valuation metrics (P/E ratio: 28.79, EV/EBITDA: 11.04) relative to sector averages.

The recent 10% surge in Hewlett Packard Enterprise (HPE) stock over the past month has sparked renewed interest in the company's prospects, with analysts and investors debating whether this momentum reflects a sustainable turnaround in the enterprise technology sector. As of September 2025, HPE trades at $25.16, with a market cap of $33.19 billion, and has attracted a Moderate Buy consensus from analysts, who project an average 12-month price target of $24.60-a 10.96% upside from current levels. This optimism is underpinned by a combination of strategic repositioning, favorable sector trends, and improving financial performance, though risks such as debt management and competitive pressures remain.

Strategic Repositioning: AI and Hybrid Cloud as Growth Engines

HPE's recent strategic initiatives align closely with the most significant trends in enterprise IT for 2025: the integration of artificial intelligence (AI) and the adoption of hybrid cloud solutions. The company has launched an AI enablement program in partnership with NVIDIA, equipping partners with tools, certifications, and training to accelerate AI deployment. That analysis also details how the initiative extends to full-stack AI solutions, from readiness assessments to deployment, positioning HPE as a key player in the AI infrastructure market. Additionally, HPE's HPE GreenLake platform-its hybrid cloud-as-a-service offering-has seen strong growth, with an annualized run rate of $2.2 billion in 2025, according to the same Monexa analysis.

The broader hybrid cloud market is projected to grow at a compound annual rate of 12.53% through 2030, reaching $311.75 billion, driven by demand for workload flexibility and data sovereignty. HPE's focus on high-margin segments like Intelligent Edge, HPC & AI, and Hybrid Cloud is expected to account for over 50% of its revenue by fiscal 2026, according to Siblis Research, a shift that could enhance profitability and reduce reliance on lower-margin hardware sales.

Market Tailwinds: AI Demand and Cloud Infrastructure Expansion

The enterprise tech sector is witnessing a surge in demand for AI-driven solutions, with companies across industries investing in generative AI (GenAI) to optimize operations and unlock new revenue streams. HPE's collaboration with NVIDIA on the "Blue Lion" supercomputer in Germany-a 30-fold performance boost over its predecessor-positions it to capitalize on Europe's push for digital sovereignty, as noted in the Monexa analysis. Furthermore, HPE's strategic investment in Multiverse Computing, a firm specializing in quantum-inspired AI model compression, underscores its commitment to cutting-edge AI infrastructure.

Hybrid cloud adoption is another tailwind. As enterprises seek to balance cost efficiency with security and compliance, HPE's GreenLake platform offers a compelling value proposition. The platform's ability to scale on-demand and integrate with multiple cloud providers aligns with the growing preference for multi-cloud strategies, consistent with the broader hybrid cloud market research cited above. Analysts at JPMorgan Chase & Co. have highlighted this as a key driver, justifying their "overweight" rating and $30 price target for HPE; MarketBeat coverage also reflects analyst price-target movement for the name.

Valuation Metrics: A Premium in a Competitive Landscape

HPE's valuation appears to reflect both its strategic momentum and sector dynamics. The company trades at a trailing P/E ratio of 28.79 and a forward P/E of 10.73, with an EV/EBITDA ratio of 11.04, per the MarketBeat competitors page. While these metrics are higher than historical averages (e.g., a 5-year EV/EBITDA average of 6.30, per the Monexa analysis), they are in line with the broader enterprise tech sector, which has an average EV/EBITDA of 27.25 according to Siblis Research.

Comparisons with peers reveal a mixed picture. For instance, HPE's EV/EBITDA of 11.04 is lower than IBM's 26.25 but higher than TD SYNNEX's 5.27. Seagate's EV/EBITDA data are reported separately; see the Seagate EV/EBITDA figures for peer context. The company's forward P/E of 10.73 also appears attractive compared to Zoom Video Communications' 157.59, though it lags behind Seagate Technology's 21.41 (see Seagate P/E data).

Risks and Challenges

Despite these positives, HPE faces challenges. Its debt-to-equity ratio of 0.69 and quick ratio of 0.69 highlight liquidity risks, particularly if interest rates remain elevated. Additionally, insider selling by CEO Antonio F. Neri and other executives could signal uncertainty about the company's long-term prospects, as covered in analyst notes and market alerts. The enterprise tech sector is also highly competitive, with rivals like Pure Storage and NetApp vying for market share in hybrid cloud and AI infrastructure (MarketBeat's competitor coverage provides further detail).

Conclusion: A Cautious Bull Case

HPE's recent stock performance and strategic initiatives suggest a credible path to sustainable growth, particularly in AI and hybrid cloud. Analysts' price targets, including JPMorgan's $30 and Evercore ISI's $28, reflect confidence in the company's ability to capitalize on sector trends. However, investors should monitor HPE's debt management and execution against its ambitious revenue targets. For those with a medium-term horizon, HPE's valuation appears reasonable given its alignment with high-growth areas of enterprise tech, though prudence is warranted in light of macroeconomic and competitive risks.