Can AI PCs Reshape HP’s (HPQ) Margin Story Or Just Repackage an Old PC Cycle?

• HP Inc. has recently been highlighted as benefiting from a rebound in PC demand and growing expectations that AI-enabled computers could reinvigorate its core personal systems business, even as it continues to wrestle with thin margins, intense competition, and liquidity pressures from current liabilities exceeding current assets.
• What stands out is the renewed attention on whether AI-powered PCs can meaningfully offset long-term concerns about margin compression, market-share pressure, and ongoing weakness across the broader PC industry.
• We’ll now examine how this renewed focus on AI-enabled PCs reshapes HP’s existing investment narrative around growth, margins, and risk.

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HP Investment Narrative Recap

To own HP today, you need to believe that a rebound in PC demand and adoption of AI-enabled PCs can support its personal systems business despite thin margins, high debt and negative equity. This latest focus on AI PCs strengthens the near term demand catalyst but does not materially change the biggest risk right now, which is margin pressure in a highly competitive, slowly growing PC and print market.

The most relevant recent development is HP’s Q4 2025 earnings, which showed full year revenue of US$55,295.0 million and net income of US$2,529.0 million, with profit margins slipping from 5.2% to 4.6%. This context matters for AI PC optimism because it highlights how much any uplift from higher spec devices may need to work just to offset ongoing compression in profitability.

Yet behind the AI PC story, investors should also be aware of the longer term drag from structural print declines and intensifying price competition...

Read the full narrative on HP (it's free!)

HP's narrative projects $56.8 billion revenue and $2.9 billion earnings by 2028. This requires 1.3% yearly revenue growth and about a $0.3 billion earnings increase from $2.6 billion today.

Uncover how HP's forecasts yield a $25.88 fair value, a 11% upside to its current price.

Exploring Other Perspectives

Four fair value estimates from the Simply Wall St Community span roughly US$25.88 to US$46.14 per share, showing how widely views on HP differ. When you set those against ongoing concerns about thin margins and a still challenged PC and print market, it underlines why many investors look at several perspectives before forming an opinion on the company’s prospects.

Explore 4 other fair value estimates on HP - why the stock might be worth as much as 98% more than the current price!

Build Your Own HP Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your HP research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free HP research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate HP's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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