Elliott Builds Over $1.5 Billion Stake in HP Enterprise

Elliott Investment Management has built a position in Hewlett Packard Enterprise Co. worth more than $1.5 billion, according to people familiar with the matter.

Elliott plans to engage with the software and networking company to help it boost value, said the people, who asked to not be identified because the details aren’t public. The investment makes Elliott one of the company’s top five shareholders, according to data compiled by Bloomberg. Elliott’s exact intentions at HPE couldn’t be immediately learned.

HPE shares, which jumped as much as 8.8% Tuesday, closed up 5.1% to $15.01 in New York trading, giving the company a market value of about $20 billion. The stock is still down 39% from its all-time high in January.

Elliott’s move is one of the first major activist campaigns unveiled after the market turmoil related to President Donald Trump’s tariff plans.

Representatives for Elliott and HPE declined to comment.

While artificial intelligence has fueled heavy demand for hardware such as servers and networking, HPE hasn’t been able to seize the moment as much as its peers including Dell Technologies Inc.

“We have always argued that HPE either does not have the required portfolio for today’s enterprise- and AI-driven infrastructure, or it does but is unable to effectively compete and win business,” Susquehanna International Group analyst Mehdi Hosseini said in a note.

In March, HPE said its profit this year would be sharply lower than analyst estimates as it grapples with tariffs, weak margins on server sales and execution issues. It also said it would eliminate about 3,000 jobs. Woo Jin Ho, an analyst at Bloomberg Intelligence, said at the time that the company’s actions suggested “meaningful inefficiencies.” Deutsche Bank AG analysts described the firm’s first-quarter results as “disappointing.”

HPE could navigate the burden of tariffs since it’s one of the server and storage companies that adhere to the US-Mexico-Canada agreement that replaced NAFTA, according to Bloomberg Intelligence.

Elliott has a successful track record in technology, having pushed for changes at Salesforce Inc., SAP SE and Citrix Systems Inc. among others. It took Citrix private in a $13 billion deal with Vista Equity Partners in 2022. Salesforce implemented growth plans to avoid a proxy fight, while SAP replaced its chief executive officer within six months of Elliott’s position becoming public.

Elliott was also a longtime investor in Dell, one of HPE’s major competitors. Dell’s shares have jumped almost 300% since its return to public trading in 2018, outperforming HPE.

The activist’s move comes as data center giants such as Microsoft Corp. have pulled back on projects around the world, while Chinese rival Alibaba Group Holding Ltd. warned of a potential bubble forming in AI data center construction.

HPE, which split from printer and PC maker HP Inc. in 2015, has been run by Chief Executive Officer Antonio Neri for the past seven years. Top managers at Crown Castle Inc. and Johnson Controls International Plc lost their jobs after fights with the hedge fund.

HPE has been a serial dealmaker. Its predecessor company bought Aruba Networks in 2015 for about $3 billion. HPE itself acquired Nimble Storage in 2017 and supercomputer company Cray Inc. in 2019.

But its largest deal to date is the pending $14 billion takeover of Juniper Networks Inc., a company that Elliott had targeted more than a decade ago. The acquisition, announced in early 2024, has been in limbo after the US Justice Department sued to block it over antitrust concerns. A trial date for the antitrust lawsuit has been set for July.