When HPE introduced its intention to purchase Juniper Networks for $14 billion in chilly, arduous money earlier this month, it was a little bit of a shock. Positive, HP had already purchased Aruba in 2015 for round $3 billion. Grabbing one other networking firm would presumably simply add one other layer to that enterprise. In fact, there are at all times problems incorporating one massive group into one other, and HP doesn’t precisely have the perfect document for being a clean operator the place that’s involved through the years.

However surprisingly, the businesses didn’t place this acutely aware coupling as a pure networking play. In reality, in a weblog publish asserting the deal, Juniper CEO Rami Rahim instructed it was extra about AI. “This mixture with HPE is predicted to allow us to ship extra complete, extra aggressive, actually end-to-end experience-first AI-native options,” he wrote.

No matter the way you place it, the deal, which pays $40 a share, or a 32% premium over the closing value on January 8 (per CNBC), represented the type of provide that was arduous for Juniper to refuse. Assuming regulators don’t object — not precisely a given today — this deal may shut later this yr or early subsequent. They’re giving a number of wiggle room for regulatory oversight.

Because the deal was introduced on January 12, HPE buyers appear lukewarm about it; that’s, if the inventory value is any indication of their sentiment. Contemplate that on January 8, the day the WSJ broke the information {that a} deal between the 2 firms was imminent, the inventory value sat at $17.72 a share. By January 12, when the deal was formally introduced, the value was all the way down to $15.89, and it has been wallowing there ever since, closing Thursday at $15.92, down nearly 8% for the month. That’s not precisely a ringing endorsement.

With a few weeks within the rearview to digest this deal, we determined to have a look at simply what this was about, and whether or not buyers ought to possibly be somewhat extra optimistic about it. As you’ll see, the businesses suppose the numbers look fairly good, and so they actually do match up effectively (as long as HPE doesn’t mess it up).

Is it actually about AI?

It’s arduous to seek out something today in tech that isn’t being positioned with an AI focus, so it shouldn’t come as a shock that the businesses are making AI the centerpiece of this deal. However is that basically correct?