June 11, 2024 at 07:47PM
We are accustomed to seeing Nvidia, Apple, and other tech
giants basking in AI glory. But what if it’s only the tip of the iceberg? It
seems so, as all analytics overlooked a sharp rise in Hewlett-Packard stock.
Let’s examine what boosted the stock price by more than 10% and its connection
to artificial intelligence.
For many, HP is synonymous with laptops, printers, and
various computer peripherals, not usually seen as a leader in innovations.
However, Hewlett-Packard’s stock chart tells a different story. The company
actively embraces new developments, as reflected in its significant earnings.
Hewlett-Packard shares have increased by 15% since the
beginning of the year, outperforming Apple
stock results.
Though a 15% increase might seem modest in the
world of Bitcoin and Nvidia, it marks a 5-year high
for HP.
The latest
price surge was driven by the company’s second-quarter 2024 financial
results. HP Enterprise reported revenue of $7.2 billion, 5.6% above forecasts
and 3% higher than the same period last year.
Earnings per share also exceeded expectations: 42 cents
against the projected 39 cents, a difference of over 7%.
A significant part of these results is tied to the magical
abbreviation — AI. Demand for HP’s AI servers and systems contributed
significantly to the revenue, with server segment sales up by 18% compared to
the previous year.
Among other factors boosting investor confidence in HP
stocks is the company’s acquisition
of Juniper Networks, which builds complex business
networks. Announced at the beginning of the year, this acquisition is expected
to impact HP in the long run positively.
Following this report, analysts revised their forecasts.
UBS raised the target price to $17 from $16, BofA Securities to $22 from $19,
Bernstein to $19 from $17, Wells Fargo to $22 from $19, and Barclays to $20
from $14. Clearly, experts are in agreement. However, it’s important to
remember that they didn’t foresee such impressive financial results before, so
you should always conduct your own research before making any trades.
This article was written by FL Contributors at www.forexlive.com.
