Hewlett Packard Enterprise Company (NYSE) stock fell about 6% in Monday’s premarket session as investors pulled back from technology and other higher-risk stocks. Nasdaq futures dropped 1.65%, while S&P 500 futures fell 0.75%.
HPE joined a broader selloff in AI-linked technology stocks as investors reassessed the outlook for AI infrastructure spending. The Financial Times reported that calls to slow AI development over safety concerns have raised questions about future capital spending.
The debate is relevant for HPE because the company sells AI servers, networking products and other data center infrastructure. The decline also follows a strong 12-month rally that pushed HPE near its 52-week high. That leaves the stock more exposed to profit-taking as investors reduce risk.
Technical Analysis
Despite Monday’s drop, HPE remains well above several key moving averages. As a result, the pullback could test whether buyers step in near important support levels.
HPE remains above its 20-day simple moving average of $54.65, 50-day SMA of $51.11, 100-day SMA of $45.12 and 200-day SMA of $34.01.
That alignment points to a bullish longer-term trend. However, the stock also has room to retreat without breaking that trend.
Momentum remains constructive. The moving average convergence divergence indicator is above its signal line, while the histogram is positive. That suggests selling pressure has eased compared with the previous downswing.
The 20-day SMA also remains above the 50-day SMA. Meanwhile, the 50-day SMA crossed above the 200-day SMA in April, forming a bullish golden cross.
HPE faces resistance near $64, just below its 52-week high of $64.25. On the downside, $51.50 is a key support area. That level sits near the 50-day SMA of $51.11.
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Analyst Outlook
HPE carries a Buy consensus rating with an average price forecast of $69.18.
On Sept. 4, Argus Research maintained a Buy rating and a $70 price forecast. Raymond James raised its price forecast to $86 while maintaining an Outperform rating on Sept. 3. Piper Sandler lowered its price forecast to $57 and maintained a Neutral rating the same day.
The stock trades at a price-to-earnings multiple of about 32, reflecting a premium valuation.
Benzinga Edge Rankings
Hewlett Packard Enterprise has a strong momentum profile, according to the Benzinga Edge scorecard.
Its Momentum score stands at 98.81, while Quality is 79.37. However, Value is weaker at 24.63, and Growth stands at 12.21.
The combination suggests momentum and quality remain HPE’s main strengths. However, weaker value and growth scores could make the stock more sensitive when investors reduce risk.
Traders may therefore watch the $51.50 support area if Monday’s weakness continues into regular trading.
ETF Exposure
HPE is held by several exchange-traded funds, including the Nuveen ESG Mid-Cap Value ETF (BATS), with a 3.48% weighting, and the Adaptiv Select ETF (ARCA), with a 5.72% weighting. The Bancroft Fund Ltd. (NYSE) also has 2.66% exposure to the stock.
Large inflows or outflows from funds with meaningful HPE exposure can contribute to buying or selling pressure in the shares.
HPE Price Action
Hewlett Packard Enterprise shares were down 6.10% at $58.30 in Monday’s premarket trading, according to Benzinga Pro data.
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