12:36 PM EDT, 10/11/2024 (MT Newswires) -- Hewlett Packard Enterprise's ( HPE ) portfolio of offerings with a particular focus on direct-liquid-cooling or DLC for exascale data centers is sound, UBS Securities said in a note.

The firm said Hewlett Packard ( HPE ) announced the fanless DLC technology, which the company said cuts power consumption by 90% compared with air-cooled systems while also freeing up valuable real estate by lowering floor space by 50%.

UBS noted that as expected, HPE didn't update guidance or give any incremental financial data or metrics at the event aside from the long-term AI total addressable market forecasts in connection with the DLC announcement.

"As such, despite a generally positive event from a technology perspective, we are not changing our financial estimates at this time given any incremental impact from either HPC Private Cloud AI or the DLC architecture are unlikely to impact HPE's near-term financial results relative to our expectations," the firm said in the Thursday note.

UBS remains cautious about AI infrastructure investments because of limited funds and uncertain returns on investment, adding that the AI investments across the enterprise vertical beyond just bots are insufficient to warrant substantial financial investments.

However, the introduction of Hewlett Packard's ( HPE ) Private Cloud AI solution in September might partially address this issue in the next two years, as a subscription-based model or offering is probably more appealing than a one-time large investment, according to the note.

UBS has a neutral rating on the company's stock with a $19 price target.

Price: 20.71, Change: +0.16, Percent Change: +0.80