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HP’s AI Push

Published by MEXEM EUROPE

May 30, 2024 2:24 PM

HP Inc. reported notable revenue growth in its computer unit for the fiscal Q2:

Overall Revenue Growth:

  • Increased by 3% to $8.43 billion
  • Surpassed analysts' expectations of $8.28 billion

Commercial Sales:

  • Rose by 6%
  • Reached $6.24 billion

Consumer Sales:

  • Declined by 3%
  • Totaled $2.18 billion

Despite the PC market's significant fluctuations over the past two years, HP Inc. {{ m-tag option="price" ticker="HPQ" currency="USD" }} has demonstrated resilience. However, in Q1 of this year, shipments showed a modest 1.5% increase, the first since late 2021, signaling a potential recovery. Industry analysts, including IDC, are optimistic that this uptick could herald the end of the slump, with expectations of accelerated growth in 2024, driven by new hardware equipped with AI-capable chips and the latest version of Microsoft Corp.'s Windows software.

AI-Powered PCs 

HP's recent unveiling of AI-powered PCs during a Microsoft conference is not just a product launch, but a significant strategic shift. According to CEO Enrique Lores, these AI PCs will constitute about 10% of total shipments in the latter half of the year, with projections to reach 50% within three years. This strategic move positions HP at the forefront of the evolving PC market, promising exciting developments in the near future.

Despite these promising developments, HP's stock has remained relatively stable, closing at $32.80 and showing a 9% gain year-to-date. This performance lags behind its peer, Dell Technologies Inc., which has more than doubled its value this year due to strong demand for AI-capable servers.

Sales and Profit Margins

For the period ending April 30, HP's total sales saw a marginal decline of less than 1%, totaling $12.8 billion, slightly above analysts' average projection of $12.6 billion. Excluding some items, profit stood at 82 cents per share, aligning with Wall Street estimates.

HP's printing business faced an 8% drop in sales to $4.37 billion. However, the company has introduced a successful subscription plan for printers and is exploring a similar model for consumer-oriented computers.

The information on is for general informational purposes only. It should not be regarded as investment advice. Investing in stocks involves risk. A stock's past performance is not a reliable indicator of its future performance. Always consult a financial advisor or trusted sources before making any investment decisions.


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