By coinnews 
00:00 Speaker A
shares of Hewlett Packard Enterprise jumpin as active investor Elliott Investment Management reportedly builds a position worth more than 1.5 billion in the company. Our next guest says this could change the AI landscape. The pistol V chief market strategist and host of the Drill Down podcast, the one and only Corey Johnson joins us now to discuss. Corey, it is great to see you. So let’s get into these headlines, Corey, because they they moved the they moved the name. Elliot Management, they build a position HPE HPE per Bloomberg 1.5 billion makes Elliot one of the company’s top five shareholders. Bloomberg saying, Corey, Elliot’s exact intentions at HPE could not be immediately learned, but what do you make of all this?
01:01 Corey Johnson
Well their intentions are for the stock price to go up. What do you mean it couldn’t be learned? I mean that’s what Elliott does. They make investments with the hopes the stock price will go up and sometimes they’re going to shake some cages to do so, rattle some cages to do so. You know, I think this is an acknowledgement of HPE’s really fantastic positioning in the world of AI and expanding their offerings in the AI world where they’re really in a strong place competing with Dell, competing with Core weave and others. Um this is not your grandmother’s Hewlett Packard. You know since the breakup in 2015, Antonio Neri has really led this company to be in a really strong place in the world of AI. And while the stock has been beaten up of late, uh it’s created an opening here for Elliott management.
02:24 Speaker A
And and Corey, let me ask you, when you talk about their strong competitive position,
02:33 Speaker A
what differentiates them there, Corey, from the Dells?
02:50 Corey Johnson
Um they so they there’s a bunch of things. Uh in particular, they’ve got some software offerings that are unique to what they’re doing, but in some ways they have some of the just top of the line products right up there with the Dell where they’ve got the latest Nvidia processors. They’ve got the latest optical networking in their systems. Um as as referenced by the fact that uh uh Elon Musk’s um XAI has placed about a billion five order with HPE and they’re sitting on billions in in order right now, uh ready to roll out these uh hopper chips and and really the most cutting edge uh design uh for um uh the servers that they’re selling. They’re also a big leader in liquid cooling. And as we go forward in the world of AI and data center construction, um the ability to keep these chips cool, to build really tightly clustered machines that can that are using copper to connect to each other, not just optical, but copper because they are so close, as as as they say at Nvidia, copper while you can because it’s so much cheaper. But because they’re using liquid cooling, they can stack these things a lot closer than the sort of build out that other data center construction would require. And so they’re in a really unique competitive space as we build out these big multi, you know, hundred billion dollar um AI data centers. HP is in a really strong place to do that.
05:02 Simeon Hyman
Hey Corey, it’s Simeon Hyman. You know, we we talked about this a little bit earlier in the show just that older companies, not just the last generation, but these are companies from like two or three generations ago that are competing so well. I think of IBM, one of the highest returning tech stocks so far this year. How is it that these companies are innovating? I don’t even know how you spell it. But the the ability to defy the to innovate as a legacy company. What is it that’s allowing these companies to reinvent themselves?
06:18 Corey Johnson
I think it’s leadership. I think, you know, you’ve watched a lot of people come and HP and I’ve watched this company really closely for a long time. And like IBM was a company you could always beat up on because they were taking, I think at one point, I figured out it was like 11 years, maybe more years, where they were taking one-time restructuring charges because this thing was such a disaster before the breakup. But Antonio Neri is just doing a really strong job at this company, putting them in the right place to succeed, dealing with the really fast iterations of change that are necessary in an AI world, and uh, you know, making the right products at the right time. And again, I think the decision is to go towards liquid cooling and really understand what it’s going to take to build out a modern data center. Decisions that are made many years ago, um, are really starting to pay off for this company. And yes, the company got beat up, uh, I think with a negative 8% print on their server business, but that was during a change over in Nvidia chips when we were going from the older architecture to the newer architecture, the Blackwell architecture. And I think, you know, the hiccup we kind of saw across the industry, HP really got beat up for that. I think maybe because of that kind of legacy stank, if you would, on the name. But I think what we’ve seen from this company is really strong execution over the course of the last few years.