• In its recently reported Q2 2026 results, HP Inc. posted revenue of US$14.41 billion, a 9% year-over-year increase driven by 13% growth in Personal Systems and AI PCs rising to 44% of shipments, while also raising its full-year non-GAAP EPS guidance to US$2.90–US$3.10.
• An important takeaway is that HP expects rising memory and storage input costs to pressure operating margins through Q4 2026, before aiming for sequential margin improvement in 2027, suggesting management is prioritizing disciplined cost control as AI PCs take a larger share of the business.
• We’ll now examine how HP’s upgraded full-year earnings guidance and growing AI PC mix may influence the company’s broader investment narrative.

Find 55 companies with promising cash flow potential yet trading below their fair value.

HP Investment Narrative Recap

To own HP today, you need to believe that AI PCs and related services can offset structural pressure in printing and intense hardware competition. The Q2 2026 beat, with 9% revenue growth and higher full year EPS guidance, supports that near term AI PC momentum is the key catalyst, while rising memory and storage costs squeezing margins into Q4 remain the biggest risk. This news reinforces, rather than changes, that short term risk reward balance.

Among recent announcements, HP’s March launch of its HP IQ and NearSense powered AI PC lineup looks most connected to this earnings story. With AI PCs already 44% of shipments, that product push helps explain the mix shift behind the stronger Personal Systems growth, while also tying directly into questions about whether higher component costs will be offset by richer AI features, pricing and enterprise adoption over time.

Yet while the AI PC story is encouraging, investors should also be aware that...

HP's narrative projects $58.3 billion revenue and $2.7 billion earnings by 2029. This requires fairly flat yearly revenue growth and a $0.1 billion earnings increase from $2.6 billion today.

Uncover how HP's forecasts yield a $22.91 fair value, a 16% downside to its current price.

Exploring Other Perspectives

Before this quarter, the most optimistic analysts were assuming HP could lift revenue to about US$59.4 billion and earnings to roughly US$3.2 billion, and they leaned heavily on AI PCs and cost savings to get there. If you are weighing that bullish view against Q2’s margin pressure and the execution risk around AI powered devices, it is worth remembering that opinions can differ a lot and this latest update may reshape those expectations.

Explore 7 other fair value estimates on HP - why the stock might be worth 34% less than the current price!

The Verdict Is Yours

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your HP research is our analysis highlighting 3 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.