Bernstein struggles to see source of differentiation for Hewlett Packard Enterprise AI public cloud

Bernstein analysts said in a note Wednesday that their firm struggles to see the potential source of differentiation for Hewlett Packard Enterprise’s (NYSE:) AI public cloud.

HPE held its Discover partner conference in Las Vegas on Tuesday, which included a one-hour investor session with CEO Antonio Neri and other executives. The company made several announcements, including a public cloud offering for AI.

“We were a little surprised that HPE announced it would enter the public cloud business, specifically for AI. Competition is formidable, and HPE lacks the account control/reputation of the Big 3 cloud providers or even IBM, as a bigger enterprise player. We note that HPE closed its Helion public cloud offering in January 2016 due to very limited commercial traction,” wrote the analysts, who have a $200 price target on the Outperform-rated stock.

However, they added that AI orders remain strong, and AI “could be a catalyst for the stock…but there isn’t sufficient disclosure to determine how much of a net step up we might see to HPE’s revenues.”

Elsewhere BofA analysts raised his firm’s price target on HPE to $18 from $17, maintaining a Neutral rating on the stock.

They stated HPE is making supercomputing as a service available later this year in North America, increasing public cloud partnership with AWS, increasing availability of pre-configured Greenlake instances at Equinix (NASDAQ:) data centers, and tighter integration with VMware (NYSE:).

“We reiterate Neutral where opportunities in Edge and AI are offset by weakness in Servers,” said the analysts.