Latest news with #WooJinHo
Yahoo
2 days ago
- Business
- Yahoo
HPE has 'long-term' AI tailwinds to look forward to
HPE (HPE) stock is moving higher after beating estimates in its fiscal second quarter and narrowing its full-year outlook despite a projected tariff-related hit. Bloomberg Intelligence senior technology analyst Woo Jin Ho joins Morning Brief to explain why HPE's tariff exposure may be less severe than expected and how the company is positioned for long-term artificial intelligence (AI) growth. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. Let's talk about shares of HPE moving higher pre-market after reporting its results for the latest quarter. HP narrowing its guidance range for the full year, saying it expects a four cent per share hit due to tariffs and revenue growth between seven and 9%. I want to bring in Woojin Ho. He's Bloomberg Intelligence's senior technology analyst. It's great to have you on this morning. Thank you for being here. Talk to me about your reaction to these results. Yeah, uh, thanks for having me on. Really positive results. I mean, a couple of things happened. AI is doing a little bit better than uh, people had anticipated. So, that drove a little bit of upside in the quarter. But more importantly, uh, some of the operational issues that hit them in in the first and second quarters, uh, they started to clean that up. So, some of the margin concerns, um, that heading into the print, uh, that was alleviated with the the commentary on the call as well as the outlook. And so, thinking through HPE, is this for investors out there that are trying to figure out whether or not they need to add it to their portfolio, at this juncture, is it, is this strong, is it a strong addition to the portfolio? Well, we don't make recommendations here at Bloomberg Intelligence. There's a couple of things that I, that I can add, uh, say, uh, is is that, uh, if you look, if you think about the, the enterprise IT play, as well as the AI enterprise player, there are only a couple of names that you can, um, um, uh, for from a US investor base, that that uh, investors can look at. It's Dell, Supermicro, and HPE. Um, I, I do think that uh, HPE, as well as Dell have long-term positive fundamentals when when AI goes from the cloud side uh, to more of the enterprise side. So, there is a long-term tailwind. It's just a little bit early, um, to, to recognize that. But uh, there are, HPE is very well-positioned for that over the long term. Can you talk a little bit more about how you are modeling out the impact of tariff policy that continues to uh, obviously develop and change for a name like this? Yeah, so we do do have, just to put a little bit of plug here, we do have a BI tariff matrix. Um, the, there, it's, look, it, it's actually multi-vector. Um, HPE's uh, tariff exposure is not as large as some people have feared. Uh, couple of reasons is that they make a lot of their boxes um, or assemble a lot of their boxes out of Mexico. So, that, that is going to be covered by the USMCA. So even if uh, July 9th does come back in and and reciprocal tariffs are, uh, do return, they, they will largely be exempt from tariffs. Now, uh, there's still some reciprocal tariff risk, uh, for the, uh, the on the HPE side, uh, for some of their products that are manufactured out of Vietnam or Southeast Asia. Uh, but, but that, that being said, you know, if there is going to be a drag on gross margin, it's going, it's going to be mainly on the gross margin side. Uh, you know, oddly, the aluminum uh, tariffs is going to hit the, the boxes that that cover it. But uh, that, that's where the drag is primarily coming from. Woojin, how much of an Elliott Management overhang is there on this name right now? We know that they had already amassed about a one and a half billion dollar stake, could be worth more at this juncture. Yeah, you know, um, if anything, it's going to be more pressure on the management team than than anything else. Um, is there an overhang? You know, it's odd, um, and maybe the timing is more coincidental. Uh, they did announce an acceleration of some of their operational or, or, or cost cut, cutting actions that was announced uh, last quarter. And there's going to be another round of uh, cost actions and operational streamlining uh, in the um, uh, you know, probably announced in the, in the October quarter as well. So, you know, they're trying to make some actions or putting some actions in place to help alleviate uh, some of, I, I guess what uh, Elliott is asking for. Uh, but at the end of the day, you know, I, I almost get a sense that they want to get a management change here. Woojin, thanks so much for taking the time here with us this morning. My pleasure. And stay tuned to Yahoo Finance. We'll be sitting down with HPE CEO, Antonio Neri, in the 3:00 p.m. hour.
Yahoo
15-04-2025
- Business
- Yahoo
Elliott Builds Over $1.5 Billion Stake in HP Enterprise
(Bloomberg) — Elliott Investment Management has built a large position worth more than $1.5 billion in Hewlett Packard Enterprise Co. (HPE), according to people familiar with the matter. How Did This Suburb Figure Out Mass Transit? Even Oslo Has an Air Quality Problem NYC Tourist Helicopter Crashes in Hudson River, Killing Six Lisbon Mayor Wants Companies to Help Fix City's Housing Shortage $15 Million Fund Bets Leadership Training Can Improve Chicago Policing Elliott plans to engage with the software and networking company to help it boost value, said the people, who asked to not be identified because the details aren't public. The investment makes Elliott one of the company's top five shareholders, according to data compiled by Bloomberg. Elliott's exact intentions at HPE couldn't be immediately learned. Shares in HPE jumped as much as 8.8% on Tuesday morning trading after the Bloomberg News report. The stock is still down about 29% this year, giving the company a market value of roughly $20 billion. Elliott's move is one of the first major activist campaigns unveiled after the market turmoil related to the President Donald Trump's tariff plans. Representatives for Elliott and HPE declined to comment. While artificial intelligence has fueled heavy demand for hardware such as servers and networking, HPE hasn't been able to seize on the moment as much as its peers including Dell Technologies Inc. In March, HPE said its profit this year would be sharply lower than analyst forecasts as it grapples with tariffs, weak margins on server sales and execution issues. It also said it would eliminate about 3,000 jobs. Woo Jin Ho, an analyst at Bloomberg Intelligence, said at the time that the company's actions suggested 'meaningful inefficiencies.' Deutsche Bank AG analyst described the firm's first-quarter results as 'disappointing.' HPE could navigate the burden of tariffs since it's one of the server and storage companies that adhere to the US-Mexico-Canada agreement that replaced NAFTA, according to Bloomberg Intelligence. Elliott has a successful track record in the technology space, having pushed for changes at Salesforce Inc., SAP SE and Citrix Systems Inc. among others. It took Citrix private in a $13 billion deal with Vista Equity Partners in 2022. Salesforce implemented growth plans to avoid a proxy fight, while SAP replaced its chief executive officer within six months of Elliott's position becoming public. Elliott was also a longtime investor in Dell, one of HPE's major competitors. Dell's shares have jumped almost 300% since its return to public trading in 2018, outperforming HPE all along. The activist's move comes as data center giants such as Microsoft Corp. have pulled back on projects around the world, while Chinese rival Alibaba Group Holding Ltd. warned of a potential bubble forming in AI data center construction. HPE, which split from printer and PC-maker HP Inc. in 2015, has been run by Chief Executive Officer Antonio Neri for the past seven years. Top managers at Crown Castle Inc. and Johnson Controls International Plc lost their jobs after fights with the hedge fund. HPE has been a serial dealmaker. Its predecessor company bought Aruba Networks in 2015 for about $3 billion. HPE itself acquired Nimble Storage in 2017 and supercomputer company Cray Inc. in 2019. But its largest deal to date is the pending $14 billion takeover of Juniper Networks Inc., a company that Elliott had agitated at more than a decade ago. The acquisition, announced in early 2024, has been in limbo after the US Justice Department sued to block it over antitrust concerns. A trial date for the antitrust lawsuit has been set for July. —With assistance from Brody Ford. (Updates HPE's share moves in third paragraph.) The Beauty Salon Recession Indicator GM's Mary Barra Has to Make a $35 Billion EV Bet Work in Trump's America Trump Is Firing the Wrong People, on Purpose Cheap Consumer Goods Are the American Dream, Actually How Mar-a-Lago Memberships Explain Trump's Tariff Obsession ©2025 Bloomberg L.P. Sign in to access your portfolio
Bloomberg
24-02-2025
- Business
- Bloomberg
WWT Untangles AI Complexities As Customers Ready Roll Outs: Tech Disruptors
World Wide Technology Technologies (WWT) has emerged as an invaluable partner for corporates embarking on their AI journey. WWT CEO and Co-Founder Jim Kavanaugh stops by the Tech Disruptors podcast studio and sits down with Bloomberg Intelligence analyst, Woo Jin Ho, to discuss WWT's evolution from a value-added reseller in 1990 to a global systems integrator that generates $20 billion in annual sales with 10,000 employees. The company was early on in identifying AI as a disruptive change in corporate IT, and through investments and the creation of its AI Proving Ground, the company has become a trusted partner and AI thought leader for Fortune 500 customers and its vendors.
