Evercore ISI has removed Hewlett Packard Enterprise (HPE) from its tactical outperform list, signaling a cautious near-term stance despite maintaining a positive long-term view. The move reflects evolving dynamics in the technology sector, particularly around enterprise spending and cloud infrastructure demand.
- Evercore ISI removed HPE from its tactical outperform list effective December 2025.
- HPE reported a 3% YoY revenue decline in its global infrastructure division in Q3 2025.
- Adjusted EBITDA margins fell to 17.4%, down from 18.6% in Q3 2024.
- Evercore maintains a $28 price target, suggesting ~12% upside based on long-term fundamentals.
- HPE’s stock declined 1.8% in after-hours trading following the announcement.
- Institutional investors may rebalance portfolios, affecting near-term market momentum.
Hewlett Packard Enterprise (HPE) is no longer on Evercore ISI’s tactical outperform list, marking a strategic shift in the firm’s near-term recommendation for the stock. While the firm continues to uphold its long-term bull case for HPE, attributing sustained value to its hybrid cloud offerings and growing infrastructure solutions, the removal suggests concerns over quarterly execution and macroeconomic pressures affecting enterprise IT budgets. The decision follows a period of mixed performance across HPE’s core segments, including a 3% year-over-year decline in revenue from its global infrastructure division during the third quarter of 2025. Additionally, HPE reported adjusted EBITDA margins of 17.4%, down from 18.6% in the same period the prior year, indicating margin compression amid heightened competition in the data center and storage markets. Despite the tactical downgrade, Evercore ISI maintains a price target of $28 per share on HPE, implying approximately 12% upside from current levels. The firm emphasizes HPE’s strategic position in high-growth areas such as AI-driven infrastructure and edge computing, which could drive long-term growth trajectories. Institutional investors tracking Evercore’s recommendations are expected to reassess their exposure to HPE, potentially influencing short-term trading volume and positioning. The move has triggered a modest 1.8% decline in HPE’s shares during after-hours trading, underscoring the market’s sensitivity to institutional sentiment shifts. Related technology stocks, particularly in the enterprise software and semiconductor sectors, have also seen slight volatility, reflecting broader concerns about capital expenditure patterns in the tech ecosystem.