Shares of HP Inc. (HPQ) surged 15.3% in the last trading session, as investors weighed strong growth projections for its personal computer business against a backdrop of stagnant earnings estimates and a highly competitive technology market. The rally brings the company, a stalwart in the PC and printing space, into focus as it navigates a market increasingly shaped by artificial intelligence.
Analysts on Wall Street project that HP’s revenues for the forthcoming quarter will reach $14.05 billion, an increase of 6.3% from the same quarter last year, according to Zacks Investment Research. This growth is almost entirely attributed to the company's Personal Systems division, which is forecast to deliver a 10.5% year-over-year revenue increase.
The growth within Personal Systems is expected to be broad-based. Projections show commercial sales rising 9.6% to $7.44 billion, while the consumer segment is anticipated to jump 13.3% to $2.54 billion. In contrast, the company's sizable Printing division is expected to grow just 0.5% to $4.20 billion, indicating a near-flat performance. Despite the stock's sharp move, the consensus earnings per share estimate of $0.71 for the quarter has not been revised upward in the past month.
This divergence presents a complex picture for investors. The question is whether the renewed strength in the PC market, which accounts for the bulk of HP's revenue, can fuel further gains or if the sluggish printing business and intense competition will cap the stock's potential. HP currently trades at a significant valuation discount to many of its tech peers, with a forward price-to-earnings multiple of just 7.28x.
The bull case for HP hinges on the revival of its Personal Systems group. The projected 10.5% growth in the segment is a significant driver, especially the double-digit jump in consumer demand. In the first quarter of 2026, HP held a 19.3% share of the worldwide PC market, second only to Lenovo, according to data from Gartner. This established position allows it to capitalize on upgrade cycles and the emerging demand for AI-capable PCs.
However, the company's Printing division, a historical cash cow, appears stagnant with forecasted growth of only 0.5%. This segment, particularly its supplies business, faces long-term secular headwinds. The lack of growth here acts as a drag on the company's overall profile and is a key reason for its lower valuation multiple compared to high-flyers like Apple (32.2x P/E) or even its direct competitor Dell Technologies (17.87x P/E).
While the 15.3% price surge reflects optimism, the market context remains challenging. The note that earnings estimate revisions do not suggest further strength indicates that analysts, while forecasting near-term revenue growth, are not yet convinced it will translate into sustained higher profitability. Empirical studies consistently show a strong link between trends in earnings estimate revisions and short-term stock performance.
Investors will be closely watching the company's next earnings release for confirmation of the strong PC sales figures and for management's commentary on the future of both the Personal Systems and Printing divisions. The stock's low valuation provides a potential margin of safety, but the path to a higher share price depends on HP proving it can consistently grow its most important segment while managing the slow decline of the other.
This article is for informational purposes only and does not constitute investment advice.
