We recently compiled a list of the Top 10 Undervalued Tech Stocks to Buy According to Hedge Funds.In this article, we are going to take a look at where Hewlett Packard Enterprise Company (NYSE:HPE) stands against other top undervalued tech stocks to buy according to hedge funds.
Artificial intelligence was the dominant story in the tech market in 2024, driving significant gains in tech stocks. The rapid advancements in AI have been a catalyst for business value, which has been reflected in the stock market performance of companies directly involved in this technology. Another major driver of the outperformers was the crypto industry. The launch of spot bitcoin exchange-traded funds in January 2024 marked the beginning of a big year for cryptocurrencies, which was further bolstered by Donald Trump’s election victory in November.
However, on January 13, CNBC reported that major tech stocks faced pressure, as the specter of higher inflation drove up Treasury yields and dampened expectations for potential Federal Reserve rate cuts this year. Higher yields increase the cost of capital and can lower both consumer spending and corporate investment. The sell-off in tech stocks extended beyond the megacap tech giants, with quantum computing stocks seeing significant drops. The broader market was also affected, with the S&P 500 and Nasdaq Composite each dropping more than 1%, following a hotter-than-expected jobs report and rising inflation expectations among consumers.
READ ALSO: 11 Best 3D Printing and Additive Manufacturing Stocks To Buy and 11 Best Potash Stocks to Buy According to Hedge Funds.
In an interview with CNBC on January 13, Daniel Ives, Global Head of Technology Research at Wedbush Securities, discussed the current state and future prospects of the tech sector, particularly in the context of rising interest rates and a strong dollar. Ives highlighted that the bull market in tech is only halfway through. He argued that strong consumer demand and capital expenditures (CapEx) in artificial intelligence (AI) are driving the sector’s growth, making market dips opportunities to invest in tech stocks. Ives believes that the fundamental strength of tech companies, especially in AI, will continue to drive positive performance and suggests a diversified approach to investing in tech. Ives also discussed the broader market dynamics, including the potential for the Federal Reserve to remain hawkish at its next meeting. He views the current environment as an opportunity to own the winners in the tech sector.
The technology sector continues to offer compelling opportunities for investors seeking value and long-term growth. As the market fluctuates, undervalued stocks offer a critical strategy for maximizing returns.
Why Hewlett Packard Enterprise Company (HPE) Is the Top Undervalued Tech Stock to Buy According to Hedge Funds?
A woman programmer in a modern office working with multiple computer servers.
To compile our list of the top 10 undervalued tech stocks to buy according to hedge funds, we used Finviz and Yahoo stock screeners to find the 40 largest technology companies trading below the forward P/E ratio of 15 as of January 13. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Number of Hedge Fund Investors: 64
Forward P/E Ratio as of January 13: 10.49
Hewlett Packard Enterprise Company (NYSE:HPE) specializes in enterprise-grade IT solutions, including servers, storage, and networking products. The company generates revenue from product sales and recurring services, such as cloud and IT management. Hewlett Packard Enterprise Company (NYSE:HPE) is transitioning to an as-a-service model, investing in edge-to-cloud platforms, and forming strategic alliances to accelerate digital transformation for its customers.
Hewlett Packard Enterprise Company (NYSE:HPE) is at the forefront of the AI revolution, with a strong focus on developing and delivering AI systems that meet the diverse needs of its customers. The company recently introduced industry-first technologies, such as the 100% fanless direct liquid cooling architecture and the 400 gigabits HPE Slingshot Direct Liquid Cool networking fabric. These advancements aim to enhance the performance of AI systems and supercomputing product lines.
Hewlett Packard Enterprise Company (NYSE:HPE) has launched the Unleash AI Partner Program, a program designed to connect businesses with software providers, system integrators, and service providers to accelerate the adoption of AI solutions by providing access to the company’s Private Cloud AI platform. The platform also allows customers to easily implement and manage full-stack AI solutions through a curated network of validated partners for companies to leverage pre-vetted partners to quickly deploy AI applications.
Overall HPE ranks 5th on our list of top undervalued tech stocks to buy according to hedge funds. While we acknowledge the potential of HPE as an investment, our conviction lies in the belief that 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 but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
Adrienne Colon is a writer at In Human News, where she covers sports, education, and tech. She has a soft spot for anything that involves a good story or an underdog—and she's always looking to tell those stories.
Adrienne's hobbies include playing basketball and reading about sports history.
