Hewlett Packard Enterprise (HPE) has agreed to acquire Morpheus Data, a hybrid cloud management software provider. This strategic move aims to strengthen the company’s cloud services platform, HPE GreenLake, with enhanced multi-cloud application management and automation capabilities.
HPE aims to simplify complex IT environments by combining Morpheus Data’s expertise with its own to help enterprises manage diverse cloud infrastructures. Furthermore, Morpheus Data’s leading position in FinOps will help HPE GreenLake customers reduce cloud spending and accelerate innovation.
Importantly, the acquisition aligns with the growing demand for hybrid cloud solutions, as businesses increasingly adopt a multi-cloud strategy. The deal, expected to close in the fourth quarter of 2024, should strengthen HPE’s position in the intelligent cloud operations market, which is projected to reach $36 billion by 2027.
HPE’s Other Expansion Moves
Hewlett Packard Enterprise is actively expanding its AI and networking capabilities. In this regard, the company announced the acquisition of Juniper Networks (JNPR), valued at $14 billion, in January 2024. The deal was under regulatory review over whether the transaction would lead to competition issues.
Nevertheless, earlier this month, the companies received a green signal from several regulators, including the European Commission, the U.K.’s Competition and Markets Authority, and the Competition Commission of India.
These strategic moves are expected to bolster HPE’s position in higher-growth, higher-margin markets.
Is HPE Stock a Good Buy?
HPE stock has risen about 12% year-to-date, reflecting strong demand for its AI offerings. However, the heightened competitive scenario keeps Wall Street sidelined on HPE stock.
With two Buys and eight Hold recommendations, HPE has a Hold consensus rating. The analysts’ average price target on HPE stock of $20.78 implies 10.77% upside potential from current levels.
