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Hedge fund Elliott Management has built a position worth more than $1.5bn in technology group Hewlett Packard Enterprise, in its first activist campaign unveiled since President Donald Trump’s tariff policy upended markets.
Elliott is yet to meet HPE’s management but it plans to engage with the hardware and software manufacturer in a bid to turn around its languishing performance, according to people familiar with the matter.
Shares in HPE have fallen by about 30 per cent this year, after declining drastically earlier this month due to market turmoil, leaving it with a market capitalisation of about $20bn.
HPE is the latest technology group targeted by Paul Singer’s hedge fund, which has nearly $73bn of assets under management. Earlier this year, Elliott unveiled a position in industrial software maker Aspen Technology, pushing for buyer Emerson to sweeten its takeover offer.
The activist hedge fund has previously targeted software companies Salesforce and Citrix Systems, information technology group Cognizant and HPE’s main rival Dell Technologies.
Elliott’s demands of HPE’s management could not immediately be established. Shares in HPE jumped 7 per cent after the news of Elliott’s investment was reported by Bloomberg.
Elliott and HPE declined to comment.
Demand for server capacity to cater to artificial intelligence companies has been a boon for HPE but it has lagged behind larger rival Dell. HPE’s server business, which was already facing margin pressures from high costs and the move to more powerful chips, stands to be the division most affected by tariffs.
At an earnings update last month, HPE cut its forecast earnings per share for 2025 to $1.80, significantly below Wall Street expectations of $2.13. The Houston-based technology group, which employs more than 60,000 people, also announced it would axe 2,500 jobs.
HPE’s finance chief Marie Myers said at the time that tariffs on goods moving between the US and China “have created uncertainty for our industry, primarily affecting our server business”. HPE was “planning to mitigate these impacts through supply-chain measures and pricing actions”, she added.
After days of turmoil in global markets, Trump last week announced a 90-day pause on sweeping tariffs. However, he maintained a 145 per cent levy on Chinese imports, exempting only smartphones, computers and microchips.
HPE was formed in 2015 after it split from the original Hewlett-Packard to form two separate publicly traded companies, alongside computer manufacturer HP Inc. HPE is at present fighting a US justice department lawsuit to block its $14bn deal to acquire network equipment maker Juniper Networks.
Elliott previously targeted Juniper in 2014, securing a settlement that allowed the hedge fund to put two directors on the board.
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