How Antonio Neri turned HPE into an unlikely AI stock

AI fever has created many new stock market heroes, from data center-owning hyperscalers to the chipmakers and power suppliers on which they depend. In recent months, it has also transformed perceptions of one of the tech industry’s oldest names: Hewlett Packard Enterprise, which investors once dismissed as a mature provider of prosaic servers, storage, and networking equipment, has doubled in value since April.

Early this month, its once-underperforming stock had its best day since HPE’s 2015 split from HP, the former Hewlett-Packard PC and printers business. The trigger was a blockbuster quarterly earnings report in which HPE reported a 40% year-on-year surge in revenues, blew through analysts’ profit forecasts, and said demand for its products was so strong that it would hit its long-term financial targets two years early.

The turnaround in the company’s fortunes could not have been better timed for Antonio Neri, its CEO. The activist investor Elliott Management took a $1.5 billion stake in HPE last year and urged its board to consider a change of leadership.

“Every time there’s an activist in a stock, there is always going to be that question,” says the Argentina-born engineer, who joined the company in 1995 and succeeded Meg Whitman as CEO in 2018. But he maintains the only strain he felt was self-imposed. As the leader of 65,000 employees with a responsibility to deliver on his strategy, “I put pressure on myself,” he says, “not because an investor shows up and says, ‘We should make a change.’”

To Neri, HPE’s stock market revaluation is not the product of a market mood shift; it is a sign that his years-long strategic effort to reposition his company is bearing fruit.

“It’s not a one-time thing,” he says. “What we’re doing is building the best networking business on the planet.”

The defining deal that almost didn’t happen

HPE traces its roots back to the Silicon Valley garage where Bill Hewlett and Dave Packard made their first audio oscillators for sound engineers working on Walt Disney’s Fantasia in 1939. Since becoming CEO, Neri has used a series of acquisitions to make HPE’s networking, cloud computing, and AI offerings relevant for the age of “the agentic enterprise.” But he singles out one deal as having redefined its market position.

The $14 billion acquisition of Juniper Networks, which Neri announced in January 2024, almost didn’t happen. The US Justice Department sued a year later to block the deal, arguing that it would give HPE too much power over the market for wireless networking solutions.

HPE turned to lobbyists with close connections to the Trump administration, and within six months the DOJ had settled its suit — an unusual U-turn. Then 13 Democratic attorneys general intervened last October, questioning whether “backroom deals” had been done to get the transaction through with only minor conditions.

Neri is waiting for a judge’s ruling but he is adamant that the deal is in the public interest. He is “respectful” of the opinions that have been aired, he adds, but “the rest is all, in my view, politics.”

The culture key to integrating deals

Neri has “absolutely not” put the task of folding Juniper into HPE on hold, however. In fact, he says, it completed the integration within five months of closing the deal last July and innovations have begun to flow from combined Juniper-HPE teams.

“The Juniper integration is a prime example of how to do large acquisitions at scale,” he says.

Before Juniper, Neri had bought Aruba Networks in 2015, SGI in 2016, and Cray in 2019. Yet he has no set formula for integrating such deals. “There isn’t really a playbook; there is experience, because not every acquisition is created equal,” he says.

There is one theme running through all of his deals, however: integrating the two companies’ cultures, rather than just their businesses, has been a key factor in their success, he says.

With Juniper, Neri set up an integration office organized into four work streams, each with a dedicated leader: general and administrative functions; product and strategy; sales; and culture.

Neri had already pushed for a more purpose-driven culture inside HPE when he became CEO, but he saw an opportunity in the Juniper acquisition to refresh that work. There were already similarities between the two companies — both were driven by engineering and customer success. But the arrival of 10,000 Juniper employees, he realized, was an opportunity to define a new culture, in which both companies’ staff could “see themselves.”

Neri symbolized that culture shift with a change in HPE’s branding. Out went the old logo, which spelled out Hewlett Packard Enterprise with a green, rectangular “element,” and in came HPE, with an open-sided version of the element as part of the E.

Neri, who worked as a professor of art and design in Argentina earlier in his career, was closely involved in the new look, which he hopes will someday be as widely recognized among its customers as Nike’s swoosh or Adidas’ three lines — even without HPE’s initials. “Over time,” he says, “you want the element to stand on its own.”

Why you shouldn’t treat AI as an IT cost

Neri unveiled several of the freshly branded fruits of the Juniper partnership this month at an event for clients in Las Vegas. Excitement among HPE’s customers about AI’s potential value to their business has been tempered lately by questions about the technology’s cost. Executives have been swapping stories of “tokenmaxxing” employees spending freely on AI tokens for underwhelming returns.

“[In] enterprise, nobody wants to be left behind [but] everybody’s worried about the cost of tokenization,” Neri says. And that has informed another part of his pitch: that it is a mistake to look at AI costs in isolation.

“If, ultimately, the IT budget goes up but my entire cost goes down, that’s all good,” he says, highlighting AI’s potential to let companies boost productivity without hiring more people. Business leaders should embrace the concept of “the AI cost of the workforce,” he says, adding that HPE now assesses its own headcount cost in this way.

When you deploy an AI agent to perform a task, Neri argues, “it’s not IT; it’s [the AI] cost of the workforce.”

The truth-telling value of an agentic butler

HPE has identified 1,200 different use cases for AI and has so far deployed 250. Automating processes allows the company to improve its productivity at a moment when customers are impatient for it to deliver faster and investors want to see higher margins.

“The most important value proposition for [enterprise clients] today is time to value,” he says: “It’s not time to market with the latest technologies, it’s time to value to take advantage of the technology to deliver a result.” HPE has to wait for components like Nvidia’s newest chips, and carry the working capital costs between ordering them and getting paid by its clients, “so I need to be very efficient.”

AI is part of the solution, and part of how Neri stays informed about what is happening in his company at a time of such rapid change. He leans on Alfred, an internal agentic platform which his finance team named after Batman’s butler, to track the data on how each part of the business is performing.

“Alfred tells me every day where I am,” Neri says. “AI will tell you the truth,” he says: “It will tell you exactly where you are, without putting fluff around you.”

Neri’s approach reflects one of his leadership principles. “You don’t get what you expect, but only what you inspect,” he says, and he seeks to strike a balance between “the right amount of inspection with the right level of empowerment.”

Elliott and the work that’s still to be done

HPE’s AI-fueled stock surge appears to have quieted Elliott, the activist investor known for ousting several other CEOs. When Elliott partner Chris Hsu joined HPE’s board earlier this month, he said his firm was “encouraged by the meaningful progress HPE has made on the execution of its strategy.”

Neri, in turn, argues that the investor simply spotted what HPE’s leadership saw: an undervalued company with “amazing assets” and “significant upside.”

Asked what difference Elliott’s presence on the board has made, Neri shakes his head, implying that it has changed little. A fresh perspective is “a great thing,” he says, “but in terms of delivering the results that we deliver, this is pure execution by our manufacturing team.”

Has Elliott told him that it still wants a change of CEO? “No. Nobody has told me that,” he replies.

HPE’s board has supported Neri’s strategy and backed him personally, he says. “They braved that, and we demonstrated that that was right, and there’s still work to do. I mean, you can’t work just in one quarter.”

Analysts who follow HPE expect its order backlog and efficiencies from the Juniper integration to translate into sustained growth, but Neri does not think his stock yet reflects its potential.

“We’re still cheap compared to some of [our] peers,” he says. “So it’s great to see the catch up, but we still have more catch up to do.”