We recently published a list of 10 Worst Blue Chip Stocks to Buy. In this article, we are going to take a look at where Hewlett Packard Enterprise Company (NYSE:HPE) stands against other worst blue chip stocks to buy.
As per Niamh Brodie-Machura, Co-Chief Investment Officer at Fidelity International, the effect of tariffs is expected to shift lower as and when the deals are made, supply chains adapt, and there is some adjustment in consumption patterns with lower tariffed goods witnessing relatively increased demand. However, there continues to be a period of increased volatility, and investors who plan to add risk should be careful. The environment is more of an opportunity to better position portfolios for resilience amidst uncertainty.
Contrary to expectations, BlackRock, in its release dated April 23, highlighted that international equities outperformed the US equities by 11% in 2025. The US growth stocks fell by 10%, and US value stocks increased by 2%. This transition demonstrates a significant market rotation throughout geography and style as value stocks continue to gain favor over growth stocks. Within the US market, value equities, mainly in defensive sectors such as healthcare, have been performing well, says the asset manager.
BlackRock also added that the narrowing of the earnings gap and the industry’s attractive characteristics, like innovation and the growth of aging populations, have been fueling the performance. Notably, active management strategies are advantageous when it comes to navigating the fluctuating markets.
BlackRock believes that the US large-cap value equities are the only major US index having positive returns YTD through March 31. Among the value equities, its investors are spotting opportunities in defensive sectors. In the current fast-moving political environment, primarily new trade policies, value equities can possess an additional tailwind. This stems from their ability to fetch a greater share of revenue from the US.
Elsewhere, if tariff discussions continue longer than expected or the average tariff rates differ from the current expectations, it is important to make portfolio changes accordingly, says Fiduciary Trust (a privately held wealth management firm). Notably, the capex spending on AI is expected to remain strong, and AI will likely fuel long-term productivity. The firm also opines that changes will be made to bank capital ratio rules, enabling them to enhance lending and/or increase stock buybacks. Both of these measures can improve earnings.
To list the 10 Worst Blue Chip Stocks to Buy, we scanned through the holdings of SPDR® S&P 500® ETF Trust and chose the ones that declined between 15%-30% on a YTD basis. After getting an extended list of stocks, we selected the ones popular among hedge funds. Finally, the stocks were ranked in ascending order of their hedge fund holdings, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Hewlett Packard Enterprise Company (HPE) the Worst Blue Chip Stock to Buy?
A woman programmer in a modern office working with multiple computer servers.
Number of Hedge Fund Holders: 66
% Decline on a YTD Basis: ~21.4%
Hewlett Packard Enterprise Company (NYSE:HPE) is a supplier of IT infrastructure products and services. Bank of America Securities analyst Wamsi Mohan maintained a “Buy” rating on the company’s stock, setting a price objective of $20.00. The analyst’s rating is backed by several factors demonstrating Hewlett Packard Enterprise Company (NYSE:HPE)’s potential for value creation. The analyst believes that the involvement of activist investor Elliott Management exhibits a belief in the company’s undervaluation as compared to peers. Notably, Reuters reported that Elliott Investment Management built a stake of over $1.5 billion in the company.
Hewlett Packard Enterprise Company (NYSE:HPE)’s investment in liquid cooling technology for AI servers provides a strong opportunity for growth in the competitive AI hardware market. With AI workloads becoming complex and power-intensive, the traditional air cooling solutions have been reaching limits. Therefore, liquid cooling provides numerous advantages that can fuel Hewlett Packard Enterprise Company (NYSE:HPE)’s success. Through managing heat more effectively, liquid-cooled systems have the ability to decrease energy consumption. This can lead to reduced operating costs for customers. Overall, the company continues to operate in a dynamic industry environment. The broader enterprise IT market continues to exhibit signs of recovery, with higher infrastructure spending as well as digital transformation initiatives. Such trends are likely to bode well for the company’s core business segments.
Overall, HPE ranks 8th on our list of worst blue chip stocks to buy. While we acknowledge the potential of HPE as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than HPE but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
Add Comment