Hewlett Packard Enterprise (HPE) is about to head into one interesting summer. One that includes cost-cutting, a battle with the Department of Justice, and likely talks with a feared activist investor.

HPE CEO Antonio Neri tells me his team is up to the tasks.

Shares traded around flat on Wednesday, with the company appearing to have stabilized its key server business after a surprisingly poor quarter three months earlier. Execs said they have tightened up the economics around server deal pricing and are holding managers more accountable for performance.

The business has "bottomed," Neri said.

Margins in the business still tanked to 5.9% from 11% a year ago. The more challenging demand backdrop has also hurt server rival Dell (DELL). HPE predicted that its efforts to right the ship, which include a heavy dose of cost-cutting, could get server segment margins to 10% by the end of the fourth quarter.

Its other segments in intelligent edge and hybrid cloud delivered margin improvement in the second quarter.

Still, HPE remains in a period of transition with a couple of key factors that could influence the direction of the stock.

The company announced several months ago that it would slash 3,000 jobs, equating to 5% of its workforce. On Tuesday's earnings call, executives said "nothing is off limits" on the cost-cutting front.

HPE expects to save about $350 million from the layoffs.

In July, the company is heading to trial against the DOJ for its blocked $14 billion deal to acquire Cisco (CSCO) rival Juniper Networks (JNPR). The outcome of the deal continues to be unknown. The DOJ had sued to stop the deal due to concerns about lessening competition.

"The DOJ's thesis is flawed," Neri said, pointing to a host of competitors in the networking space.

The end result could dictate how HPE addresses feared activist investor Elliott Management, which in April revealed a $1.5 billion stake in HPE.

Elliott's intentions on HPE are unclear, and a spokesperson didn't return Yahoo Finance's request for comment. But Elliott's playbook often shakes up a company's board to unlock shareholder value, either by enacting a new stock buyback plan or fresh cost-cutting commitments.

HPE certainly has the cash to consider a buyback to appease Elliott if the Juniper deal falls through. The company currently has $11.7 billion in cash, equating to an outsized 50% of its market cap.

"In addition to management highlighting the focus on cost management and efficiency ... the team also highlighted the appetite for pursuing capital return and portfolio actions beyond current endeavors, which in aggregate could drive enthusiasm with investors who have already been closely watching for further developments following the involvement of Elliott as an activist shareholder," JPMorgan analyst Samik Chatterjee wrote in a note.