Hewlett Packard Enterprise shares fell nearly 11% on September 14, closing at $55.41. This decline followed a decision by Evercore ISI analyst Amit Daryanani to downgrade the stock from Outperform to In Line. Despite the downgrade, the analyst maintained a price target of $65 for the company.
Prior to the drop, HPE shares had risen approximately 159% year-to-date through September 11, driven by demand for AI-optimized servers and the acquisition of Juniper Networks. The company reported revenue of $12.21 billion for the July quarter, representing a 33.7% year-over-year increase.
Before the recent price adjustment, the stock was trading at roughly 13 times fiscal 2027 earnings, which is a 60% premium compared to its five-year average multiple of 8 times. Evercore ISI noted that while the business remains strong, the stock has reached fair value with fewer catalysts ahead.
The decline in HPE stock occurred alongside broader selling pressure on AI hardware companies, including Intel, AMD, and Marvell. Market sentiment was also affected by comments from Anthropic CEO Dario Amodei regarding a potential slowdown in AI model development and OpenAI confirming no IPO for 2026.
