Billionaire investor David Einhorn says buying HP stock is a cheap way into the AI craze

• David Einhorn said machine hardware shaper HP could yet use from AI.
• HP will apt spot "high-teens growth" successful nan years ahead, he said.
• He said HP banal trading astir 10x net looks "very reasonable."

Famed hedge money investor David Einhorn is eyeing a tech banal that could beryllium an under-the-radar artificial intelligence play.

The Greenlight Capital laminitis said his patient isn't needfully willing successful nan parts of nan marketplace wherever investor enthusiasm is highest. Instead, his money is betting connected much affordable names that whitethorn beryllium positioned to use from AI down nan road.

One of these names is machine hardware patient HP, Einhorn told Bloomberg TV.

"PCs are owed for a regular replacement cycle, because a batch were bought aft COVID successful 2020, and 2021, and we could person a amended than normal rhythm if 'AI PCs' move retired to beryllium a thing," Einhorn said.

HP is up complete 20% year-to-date, trading astatine $36.21 per stock arsenic of 2 p.m. ET connected Thursday.

Einhorn said he sees nan institution connected gait for accelerated maturation complete nan adjacent fewer years. The banal is trading 10 times earnings, pays a dividend output of complete 3%, and spends 100% of free rate travel paying shareholders, he said. Buyback output is astir 7%.

"So we spot mid-teens, high-teens maturation for nan adjacent mates of years, conscionable arsenic you spell done a rhythm stock count reduction, and truthful for this you're paying conscionable 10 times net — which is very reasonable from our perspective," Einhorn outlined.

More salient AI plays are little alluring arsenic nan marketplace has go progressively expensive, he said.

Einhorn made a akin statement successful Greenlight's latest quarterly missive to investors, saying that nan tech sector's "nosebleed valuations" person made nan marketplace progressively risky.

"I deliberation nan marketplace arsenic a full is really rather expensive, considering we're successful a beardown portion of nan economical rhythm and we're astir 23 times earnings," he told Bloomberg. "So it's difficult for me, arsenic personification who really pays a batch of attraction to what I salary for things, to want to pursuit those things."

Away from AI space, Einhorn said that nan fittingness instrumentality institution Peloton looks importantly undervalued. After he made nan statement astatine nan Robin Hood Investors Conference connected Wednesday, nan banal spiked 11% that day.