Hewlett Packard Enterprise (HPE, Financial) recently held its inaugural AI Day, highlighting its advanced fanless direct liquid cooling system and unveiling new servers featuring the latest AMD processors (AMD). Despite some initial buzz, the event received a lukewarm response from investors and analysts.
According to Seeking Alpha analyst Michael Del Monte, the fanless architecture can potentially reduce data center cooling costs by 90%, as cooling pipes cover various server rack components including GPUs, CPUs, server blades, local storage, and networking structure. Del Monte noted that HPE is positioning itself as a provider of plug-and-play server racks, capable of supporting AI testing and inference computing needs, whether hosted internally or within HPE's Green Lake.
Susquehanna has assigned HPE a "neutral" rating with a target price of $20. Analyst Mehdi Hosseini is optimistic about HPE's liquid cooling assets, suggesting they could enhance the company's performance and position it as a crucial partner in the AI manufacturing and solutions landscape. However, he cautions that tangible contributions may not materialize until at least a year later.
Citi has also given HPE a "neutral" rating and a target price of $20, with analyst Asiya Merchant impressed by the scale of HPE's direct liquid cooling capabilities. Merchant believes that the industry's adoption rate of direct liquid cooling, compared to air cooling, and the growth in AI market share boosting profitability, will be key metrics for investors to gauge HPE's success. She added that air cooling might still account for over 50% of the potential AI market by 2027.
Seeking Alpha analyst Dan Victor stated that the event was an excellent opportunity for HPE to inform the market about its current position ahead of its quarterly earnings report scheduled for release next month.
As of the latest report, HPE's stock increased by 0.75%, reaching $20.695.
