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I want to make cash that will afford me more than a my beat ass 96 miata and seeing you all get rich on this ai shit is making me super sad. I've missed basically every obvious AI trade. I can take some solace in knowing that grandma's boy is doing worse, but still...
So, I spent the weekend doing something that most of you regards dont have the patience for: reading AI infrastructure DD, asking Gemini the same questions over and over again. The brAInrot is real...I'm smarter and dumber at the same time now.
NVDA already ripped. AVGO already ripped. Memory ripped. Power and cooling names ripped. Networking names ripped. I'm now convinced that Hewlett Packard Enterprise is the move.
Yes, I know, you hear HP and think shitty laptops that your corporate IT hands out. Not to mention those annoying ass printers. The brand is not sexy. It is not the next NVDA. If you say it is, I cannot help you, but godspeed. To be clear for those who can't read good, HPE is not HPQ.
I’m not saying HPE is going to become NVDA with a printer logo. That’s regarded. I’m saying the market may still be treating it like a dead server vendor when Juniper basically stapled a real networking business onto it at the exact moment everyone is panic-building AI plumbing.
HPE closed the Juniper deal on July 2, 2025 and Juniper changes the mix. HPE is not just laptop shit boxes anymore. Networking is now a much bigger part of the company, and networking is one of the areas that actually matters for AI buildout. They need servers, switching, routing, storage, security, cooling, services, and enterprise hand-holding. HPE sells a lot of that. That is the setup.
HPE closed at $37.58 on May 22, basically at 52-week highs, so no, it is not some hidden gem I've discovered. The stock has already moved. But it still trades around 15-16x FY26 non-GAAP EPS guidance, which is not stupid compared to a lot of AI-adjacent names.
[Decent Value](https://preview.redd.it/siw0l98g6i3h1.png?width=1600&format=png&auto=webp&s=ea9a9a3b625824f3fee231976765f9e985c67fb2)
Q1 was not some face-ripping miracle, but it also wasn’t the boomer corpse quarter I expected. Revenue was $9.3B, up 18% YoY. Non-GAAP EPS was $0.65. Free cash flow was $0.7B. FY26 guidance is $2.30-$2.50 non-GAAP EPS and at least $2B in free cash flow. The big part is Networking. Networking revenue was $2.7B, up 151.5% reported. Important: this is because of Juniper, so no, I am not pretending they organically discovered cocaine and became a growth stock overnight. Rather, the mix changed, and I think that matters. AI Systems backlog entering Q2 was $5B. Again, backlog is not revenue, but it is also not fake internet points. Customers are at least lining up at the counter. Now HPE has to prove they can actually serve the meal without dropping it on their shoes.
The activist angle is also real. Elliott reportedly has a stake north of $1.5B. HPE added Robert Colderoni to the board and created a Strategy Committee. This matters because HPE management is not led by a meme-king oracle posting hieroglyphics from his phone, and thank God, because I have already donated enough brain cells to that storyline. Its taken years to move away from that cult trade. This is more like competent-ish big company management with activists standing behind them making sure they do not turn Juniper into dogshit.
Anyways, there are some upcoming potential catalysts for price action. Q2 earnings are June 1 after close. If they show AI/networking demand is real and guidance holds or improves, the rerate can continue. If they miss, the market may remember this is still HPE and beat the stock back down. HPE Discover is June 15-18. That should be management’s chance to hammer the AI/networking/Juniper story. Probably some big important words like “hybrid cloud,” “enterprise AI,” and “sovereign AI,” will be mentioned. I will pretend to understand all of them if the stock goes up.
[Momentum is strong, short-term RSI is hot, but the broader trend still isn’t cooked.](https://preview.redd.it/dug9cecs7i3h1.png?width=1600&format=png&auto=webp&s=f9abd1429abd7dcab850767e9d97792623860a5f)
Now, before someone in the comments calls me a bag holder, yes, the bear case is real. The stock already ran. It is near highs. Networking growth is acquisition-driven. Cloud & AI revenue was down 2.7% in Q1. Networking margin fell YoY. Juniper integration can get messy. GAAP EPS is way lower than non-GAAP EPS. AI backlog can fail to convert. Analysts’ average target is reportedly below current price, which either means the Street is asleep or I am volunteering to be a cuck once again.
So the trade is basically this:
Either HPE is a boring hardware vendor getting re-rated into AI infrastructure and networking because Juniper changed the business and activists are forcing discipline, OR it is a boomer value trap and the run up is done. I think the first outcome is more likely than the market is pricing. Even so, tough to swallow given Friday's move, which is exactly why I hate that I like it.
TLDR:
It's not even that long (what she said)...
HPE is a boring AI plumbing rerate: Juniper made networking matter, the stock ran, but roughly 16x FY26 non-GAAP EPS guide is not bubble pricing. Q2 and Discover decide whether it keeps rerating or gets sent back to boomer hardware jail.
Position:
https://preview.redd.it/m5r6quky5i3h1.png?width=1334&format=png&auto=webp&s=ed7921ea1f79ced352c11b69ccff8ac94e805b3e