Hewlett Packard Enterprise (HPE) CEO Antonio Neri is holding out hope his prized acquisition of Juniperg Networks (JNPR) will close in early 2025. 

"I have no pause about the deal [getting done]," Neri told me on Yahoo Finance (video above). "It's a good deal for customers." Neri added it would help strengthen national security. 

The tech giant announced the $14 billion purchase of Juniper Networks in January. If completed, the acquisition would double HPE's existing networking business. It would mark one of the biggest deals for the company since it spent $3 billion in 2015 to buy Aruba Networks. 

Fresh concerns about the deal have crept into the picture. The FT reported several weeks ago that HPE officials met with Justice Department antitrust enforcers to argue against a challenge to the deal. 

The Justice Department under Biden has been scrutinizing big deals that could decrease competition. Recently, the FTC was successful in blocking a handbag merger between Tapestry (TPR) and Capri Holdings (CPRI).

Neri still thinks the acquisition will come to fruition in early 2025 and is likely to receive approval from the Biden administration.

Despite the unknowns of the Juniper deal, HPE's performance continues to match Wall Street expectations. 

On Thursday, after market close, the company reported fiscal fourth quarter earnings in line with estimates. Demand was brisk for servers as AI infrastructure build-outs continue. Two of the company's three main segments notched operating margin expansion in the quarter. 

HPE guided relatively in line with consensus forecasts for the current quarter. 

"While AI orders/revenues can be lumpy, we see the potential for stronger contribution from enterprise AI and sovereigns which bodes positively for revenue momentum and margins ahead. Coupled with improving demand outlook in core enterprise infrastructure spending and potential EPS accretion from Juniper acquisition with management confident in closing the deal by early 2025, we are increasingly more constructive," said Citi analyst Asiya Merchant. 

Merchant upgraded her rating on HPE to Buy from Neutral and sees fair value at $26 a share. Of the 18 analysts on the Street that cover HPE, nine rate the stock a Buy and nine rate it a Hold, according to Yahoo Finance data.

HPE shares rose 9% on Friday's session to $23.75. The stock is up 40% year to date, lagging rival Dell's (DELL) gain of 63%.

Earnings overview: Beats on top and bottom lines

• Net sales: $8.5 billion (+15% year over year) vs. $8.25 billion estimate (Guidance: $8.1 billion to $8.1 billion

  • Server sales: +32% year over year to $4.7 billion

  • Intelligent edge sales: -20% year over year to $1.1 billion

  • Hybrid cloud sales: +18% year over year to $1.6 billion

• Gross profit margins: 30.9% compared to 34.8% a year ago

• Diluted earnings per share: $0.58 (+12% year over year) vs. $0.56 estimate

What else caught our attention: The odds and ends

• Free cash flow fell $851 million from the prior year to $1.5 billion.

• Operating profit margins fell to 24.4% from 27.1% in the Intelligent Edge segment.

• Operating profit margins rose in the Server and Hybrid Cloud segments.

• Total AI systems backlog stood at over $3.5 billion, up from $3.4 billion in the previous quarter.

• First fiscal quarter guidance:

  • Net sales: up by a mid-teens percentage (in line with consensus estimates)

  • Diluted earnings per share: $0.47 to $0.52 (estimate: $0.49)

Industry vibe: The AI hype

The AI race is well underway. But is there too much hype and too much money being invested in startups that aren't working on true AI breakthroughs?

Veteran tech executive and C3.ai (AI) CEO Tom Siebel thinks the hype has gotten out of control, as many AI companies believe they are selling "God in a box."  

Three times each week, I drive insight-filled conversations and chats with the biggest names in business and markets on Opening Bid. You can find more episodes on our video hub or watch on your preferred streaming service.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.

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