HP just dropped its Q3 results, and it’s looking pretty solid! Analysts are buzzing about how AI PCs could be the game-changer, pushing growth well into 2026. Is this the turning point for the tech giant, or just a temporary boost? What do you think about the future of computing?
HP (NYSE:HPQ) recently delivered robust Q3 **earnings**, effectively calming market anxieties surrounding the personal computer and printing sectors. This strong performance prompted **JPMorgan** analyst Samik Chatterjee to reaffirm an Overweight rating on the stock, significantly elevating his price target to $30, driven by the burgeoning momentum of **AI PCs**, the anticipated Windows 11 refresh cycle, and strategic gains in its supply chain.
Chatterjee’s reassertion of confidence in **HP** is a testament to the company’s resilience, leading him to raise the December 2026 price forecast. He cited a notable reduction in downside risks to fiscal 2025 estimates, suggesting a more stable and predictable financial trajectory for the tech giant. The fiscal third-quarter results were pivotal in assuaging investor concerns about a potential slowdown in the broader PC **stock market** and perceived margin pressures within the printing segment, as the company not only met substantial revenue targets but also maintained its full-year **Tech Outlook** despite various macroeconomic headwinds.
A significant driver of this positive Tech Outlook is the rapid adoption of AI PCs. Chatterjee highlighted that these advanced computing devices already constitute an impressive 25% of HP‘s overall product mix, spanning both consumer and enterprise segments. This early integration of artificial intelligence capabilities is playing a crucial role in stimulating refresh momentum across the industry, further amplified by the ongoing Windows 11 upgrade cycle, which encourages users to transition to newer, more capable systems.
Furthermore, HP demonstrated commendable operational prowess by expanding its Personal Systems (PS) margins sequentially. This achievement was primarily attributed to effective pricing strategies and a proactive diversification of its supply chain, particularly by reducing reliance on China. Analysts anticipate further margin gains in the fiscal fourth quarter, indicating a sustained positive trend in operational efficiency and profitability for the company amidst a competitive stock market landscape.
The Print segment, a traditional cornerstone of HP‘s business, also showed remarkable stability, maintaining its margins at 17.3%. This figure comfortably sits within the company’s long-term target range, and guidance for the upcoming quarter points towards margins at the upper end of this range. This solid performance in printing is particularly noteworthy given the persistent competitive pressures and tariff-related challenges that continue to impact the global market, underscoring HP‘s strategic execution.
From a financial perspective, the third quarter saw HP achieve a total revenue of $13.9 billion, aligning perfectly with JPMorgan‘s estimates and surpassing consensus forecasts. This revenue was judiciously split, with Personal Systems contributing $9.9 billion and Print revenue accounting for $4.0 billion. Earnings Per Share (EPS) for the quarter stood at $0.75, precisely matching market expectations, reinforcing the company’s ability to meet financial projections even amidst dynamic market conditions.
Looking ahead, HP has provided a fourth-quarter EPS guidance ranging between $0.87 and $0.97, with JPMorgan‘s forecast positioned at $0.91, suggesting continued optimism. The company also reiterated its free cash flow guidance of $2.6–$3.0 billion for fiscal 2025, signaling robust financial health and a strong capacity for future investments. These projections underscore a confident Tech Outlook for the company.
Chatterjee’s forward-looking analysis projects a mid-single-digit growth in the broader PC market during the second half of fiscal 2025, with the significant momentum of AI PCs expected to extend well into 2026. While the print market is projected to experience a structural low-single-digit decline through 2026, HP‘s proactive strategic execution, ongoing cost optimization efforts, and a resilient, diversified supply chain are anticipated to serve as crucial mitigating factors, ensuring the company’s sustained performance and adaptability in an evolving technological landscape. This comprehensive Tech Outlook positions HP for continued relevance.
