HPQ can convert AI-enabled refresh demand, services attach, and disciplined cost actions into more resilient earnings than the market expects.
HPQ faces a fading PC replacement cycle and rising input costs that threaten margins, estimates, and its valuation ceiling.
NTAP estimates rise on storage ASPs, while HPQ estimates/PT fall to $21 on PC share loss, -31% units vs. industry -20%, and sub-5% PSG margins.
Goldman Sachs cut its numbers for the company due to a significant loss in PC market share, with unit sales declining more than the industry average.
The company is not providing financial guidance for FY27, and its preliminary planning assumption, consistent with third-party forecasts, is for industry-wide personal computer unit volumes to decline roughly mid-single-digits in percentage terms in calendar year 2027 compared to 2026.
The company is not providing FY27 guidance, and its preliminary planning assumption for industry PC units to decline mid-single digits in CY27 reinforces concerns that the Win 10/AI PC refresh is pulling demand forward into 2026.
The primary concern is not the lack of formal guidance, but rather the potential for the next phase of PC growth to be weaker, just as investors were beginning to anticipate a more durable replacement cycle.
RBC initiated coverage with a Sector Perform rating and a $33 price target, noting the company is well positioned for the AI PC refresh, with AI PCs expected to reach 60–70% of shipments by FY27.
PC revenue is expected to hold up better through pricing, premium mix, and share gains, with peripherals/services attach supporting profitability.
Print margins are expected to remain in the upper half of the 16–19% long-term range.
Near-term upside is constrained by memory/storage inflation and ongoing Print declines.
PC units are expected to fall mid-teens y/y in 2H26.
RBC initiated at Sector Perform given valuation and execution risk.
DELL/HPE/HPQ +3-5% on the back of better Lenovo results overnight.
Investors are too focused on cyclical PC demand and underestimating multiple emerging profit drivers.
A longer-lasting PC refresh cycle is driven by AI PCs, Windows migration, and commercial upgrades, with AI-enabled devices becoming a meaningful attach opportunity through services, software, security, and premium hardware.
Upside is expected from margin expansion initiatives, growing software and services contribution, and AI workstation and edge-AI opportunities, as AI could make the PC business more resilient and structurally profitable.
PC related names with a bid following Lenovo: HPQ +15%; CDW +4%
The company's stock received a bid following Lenovo's better-than-expected results, suggesting positive read-throughs for PC-related names.
PC related names with a bid following Lenovo: HPQ +15%; CDW +4%
The company is viewed as highly exposed to potential margin and EPS guide-down risks later in the year.
Into earnings, MS sees DELL as the best tactical setup near term, while HPQ and NTAP are viewed as most exposed to potential margin/EPS guide-down risk later in the year.
The stock was down early as Nvidia denied any PC-related acquisition.
NVDA: Hearing 3p positive saying favorable BW deployment trends support upside for DC revs DELL/HPQ -2% early as NVDA denies any PC related acquisition Data Centers: TD Cowen Channel Checks Flag Record ~9.4GW of 1Q26 U.S. Hyperscaler/AI Lab DC Leasing, but...
The price target was lowered due to expected secular pressure across PCs and Printing, with limited catalysts into 2026.
The current memory cycle is unusually acute, pressuring the PC business, with pricing and inventory likely weighing on demand later this year despite a brief near-term pull-in.
Commercial demand, while more insulated, is not immune to pushouts.
The Windows 11 refresh is largely complete in the U.S. at ~60% penetration, with upside diminishing as adoption approaches ~70%.
Further gross and operating margin risk is flagged from memory supply and competition, with operating margin deceleration forecasted even with lower FY26 SG&A dollars and flat R&D.
The firm highlights insatiable, relatively price-insensitive demand for NAND and HDDs, noting NVIDIA’s Rubin KV-cache requirements could drive up to ~5x NAND TB per GPU, while rising memory prices pressure OEM margins, with HPQ and SMCI seen as most exposed...
Management is taking multiple actions to offset memory cost headwinds, including qualifying additional memory suppliers, leveraging the balance sheet, reconfiguring PCs, optimizing non-memory BOM and overhead, and selective pricing actions.
Management is confident in supply access and potential share gains against sub-scale peers, with peripherals and Windows-driven refresh supporting free cash flow.
The company is actively mapping SKUs by region, advising customers on configurations and early order lock-ins, with constructive pricing discussions and intact procurement discipline.
Management remains confident in supply access and potential share gains versus sub-scale peers, with peripherals and Windows-driven refresh supporting FCF, despite potential unit pressure at the low end of the PC market amid memory constraints.
Unit pressure could emerge at the low end of the PC market due to memory constraints.
Main read-throughs that should get a bid today are other names where tight supply/demand is causing pricing to be strong: HDDs (WDC/STX), NAND (SNDK), and Optical (LITE, COHR). Hearing some fears this morning around rising DRAM prices mean for Hardware (AAP...
Research through 2026-11-03 · 2025-12-18 to 2026-11-03 · 14 source reports.
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Research through 2026-11-03. Artifact validity does not establish factual accuracy or research freshness.