HPQ trading activity jumps by 75.66% to reach $880 million, placing it at 136th, as the market responds with mixed sentiment to its earnings outperformance and conservative outlook

Market Overview

On February 25, 2026, HP Inc. (HPQ) ended the trading day with a slight gain of 0.05%. Trading activity was robust, with volume jumping 75.66% to reach $880 million, placing the stock 136th in daily market turnover. Although HPQ surpassed Wall Street’s expectations for the first quarter—posting earnings of $0.81 per share compared to the anticipated $0.77 and generating $14.44 billion in revenue versus the forecasted $13.94 billion—investor sentiment remained cautious. The company’s conservative outlook for the second quarter, projecting GAAP EPS between $0.70 and $0.76 (below the consensus of $0.74), contributed to a subdued market response despite the earnings beat, reflecting broader uncertainty among investors.

Main Performance Factors

HPQ’s first-quarter results revealed uneven trends across its divisions. The Personal Systems segment, which makes up 71.5% of total revenue, expanded by 11% year-over-year to $10.3 billion, driven by a 12% increase in PC shipments and strong demand for Windows 11 and AI-enabled devices. Both Commercial and Consumer Personal Systems revenues advanced—up 9% and 16%, respectively—demonstrating strength in both enterprise and consumer markets. In contrast, the Printing business contracted by 1.9% to $4.19 billion, with Supplies revenue slipping 1% and Consumer Printing dropping 5.4%. Analysts pointed to evolving customer preferences and heightened competition from alternative brands as key factors behind the decline.

Looking ahead, management flagged several near-term obstacles. CFO Karen Parkhill highlighted rising memory prices and anticipated that second-quarter results would likely fall at the lower end of the $2.90–$3.20 adjusted EPS range for fiscal 2026. The company faces significant margin pressure due to component cost inflation, which has doubled from earlier projections. In response, HP is implementing price increases and optimizing its supply chain. While margins in the Print segment are expected to stabilize thanks to previous pricing actions, the Personal Systems division is contending with a greater mix of education and consumer sales, which is weighing on profitability.

Analyst opinions mirrored these challenges. Wamsi Mohan of Bank of America downgraded HPQ to Underperform and reduced the price target to $16, citing sluggish PC demand, margin compression from higher memory costs, and uncertainties related to leadership changes. The Zacks Rank #4 (Sell) for HPQ reflects negative revisions to earnings forecasts and the stock’s 17.6% underperformance relative to the S&P 500 so far this year. Despite generating $230 million in adjusted EBITDA and $126 million in free cash flow during the first quarter, analysts remain wary of structural risks such as market saturation in North America and weaker oil and gas sector investments.

On the strategic front, HP’s efforts to expand into areas like 3D printing, Device-as-a-Service models, and international markets are seen as possible growth drivers. The company’s advancements in AI-powered PCs and FlexRobotics drilling technology (the latter associated with Helmerich & Payne) underscore a focus on innovation and differentiation. However, these initiatives must counterbalance ongoing macroeconomic headwinds and competitive threats. With shares trading near their 52-week low of $18.00 and management’s cautious guidance, investors appear to be bracing for a tough landscape for hardware and printing companies in 2026.

Future Prospects and Strategic Direction

HPQ’s success will depend on its ability to manage volatile component costs and defend its position in a mature PC market. The company’s focus on restructuring, cost control, and subscription-based services is in line with industry shifts, but these strategies may require time to yield tangible results. With projected fiscal 2026 revenue of $3.93 billion and a goal of increasing EPS by $0.19 by the first quarter of 2027, HP’s future will hinge on the effective execution of its mitigation plans. Investors are expected to closely monitor the company’s second-quarter performance and future guidance to assess HPQ’s resilience in an environment marked by rising costs.