HPE's Juniper acquisition is successful with higher-than-expected synergies; networking risks are behind, but future positive surprises depend on the security story.

We now know that HPE is increasingly viewed as a networking company rather than a computing company. In your opinion, how important is this shift in investor perception and what does it mean for the stock?

I think it's a big change for HPE. It is clear that most investment analysts who know about it believe it to be a computing company. So, it was a big gamble for HPE CEO Antonio Neri to acquire Juniper Networks, but I think it proved to be the right decision because they can now play that vital role in powering the graphics processing units running on HPE servers.

Well, I think the Juniper integration is very interesting. Things appear to be progressing faster than expected, with synergies targets now rising to around 800 million. And regarding the risks of mergers, are they now largely behind us?

Do you still see it as a potential cause for concern as we approach the second half of this year?

Look, there are always concerns on this side. I truly believe they did a better job than even I expected. I was very skeptical that they could even reach 450. If you look at history, HPE hasn't been a great acquirer, but I think they've learned some things in the past, and I think one of the things they've done here is let the very smart Juniper team manage the merging of network clusters, which has created a lot of synergies.

For me, the next step for HPE is to find a way to integrate what they do on the computing side with the networking side. And I think, as you know, we may see that in the future.

But the first task, of course, was integrating network clusters, and now I think you'll want to build a bigger story for HPE. So, there may be some risks associated with consolidation here, but I think that on the networking side, that concern is largely behind us.

One thing that also seems very clear, and this probably started in late spring or early summer, is that the market actually started to buy into the story, and saw the stock price being rewarded for it.

So, as you look at HPE here, it's trading at $70 per share compared to where it started the year at around $20. Where is the element of surprise that will continue to drive this upward trend?

From your point of view, is the market fully aware of what is happening now?

I think traditional network analysts are certainly like that. I think they need to attract traditional computing analysts, people who have historically looked at HP. I think, Alex, as you pointed out, there is a better awareness on Wall Street now of the role of networks, and we are seeing a rise in this sector.

I think the important part for HPE going forward is that it also has a good security story. They don't tell that story much, actually, and I think you can see what they're trying to do in the field of secure networks, which is to create that positive surprise for the future.

But I really think the story of the networks, and the numbers that HPE provided, I think they are already included in those numbers now, and I expect the positive surprise to come from something like security.

Well, I think what's really interesting is that security was a relative weakness, but we also saw that they targeted what I mean by over a billion dollars as an opportunity in AI networks.

So, how important is that? I mean, can this business continue to grow as organizations build their AI infrastructure? Regarding the current demand dynamics, do you expect things to continue returning to normal from here or improve further?

No, I think there are more gains to come, and one of the big conclusions I came away with from the event, after talking to distributors, customers and other network vendors, is that there is a huge amount of legacy infrastructure out there.