HP Inc. (NYSE: HPQ | HPQ Price Prediction) reports its fiscal first-quarter 2026 results today after the close. With the stock down nearly 17% year-to-date and sitting near its 52-week low of $18.12, the pressure on management to deliver is real.
A Stock Under Pressure, A Business in Transition
Last quarter, HP closed out fiscal 2025 on a strong note. Revenue came in at $14.64billion, beating the $14.49 billion consensus by a meaningful margin and growing 4% year over year. Non-GAAP EPS of $0.93 just pasted expectations of $0.92. Personal Systems was the clear engine, with revenue up 8% on increased average selling prices and 7% unit growth. Printing continued its slide, falling 4% year over year.
Since that November report, the stock initially rallied, gaining nearly 12% in the week following results, before giving back all of those gains and then some. The market’s concern centers on two issues that have grown louder heading into today: memory cost inflation and the durability of the PC refresh cycle.
Management flagged the memory headwind explicitly on the Q4 call. CFO Karen Parkhill estimated a 30-cent impact from projected memory cost increases, net of mitigations, baked into full-year guidance. CEO Enrique Lores noted that memory costs now represent 15% to 18% of the cost of a typical PC, and that the pace of increases had accelerated in recent weeks.
Consensus Estimates
| Metric | Q1 FY2026 Estimate |
|---|---|
| Non-GAAP EPS | $0.77 |
| Revenue | $13.925 B |
Memory Costs, Margins, and the AI PC Offset
This is the quarter where execution matters more than narrative. I’ll be watching gross margin closely. With memory costs accelerating further into Q1, a margin squeeze could deepen.
Management outlined several mitigation strategies, including qualifying lower-cost suppliers, redesigning the portfolio for reduced memory configurations, and raising prices in coordination with channel partners. How much of that is showing up in Q1 results will be a key signal for whether the full-year guidance range of $2.90 to $3.20 in non-GAAP EPS is achievable.
On the demand side, you should watch AIPC momentum. AIPCs represented more than 30% of shipments in Q4, and management expects that to reach 40% to 50% in fiscal 2026. The Windows 11 refresh remains a real tailwind. About 60% of the installed base have been converted at the end of Q4, with the biggest remaining opportunity in SMB customers and markets outside North America.
Printing will stay in the background, but watch supplies revenue. Supplies declined 3% year over year in constant currency in Q4, and management guided for continued low single-digit declines in fiscal 2026. Any acceleration in that decline would put pressure on the Print segment’s 18.9% operating margin, which has been a reliable profit contributor even as hardware volumes shrink.
Wall Street’s posture is cautious. Of 17 analysts covering the stock, 10 rate it a hold, 3 a sell, and 1 a strong sell, with an average price target of $23.21. Morgan Stanley and Bank of America both carry sell ratings with $18 price targets.
More Than a Single Quarter Print
HP’s Investor Day is scheduled for April 23, where management plans to lay out how AI is transforming the business. Today’s results set the credibility baseline for that conversation. If HP can show it is managing memory headwinds without sacrificing free cash flow, and that AIPC demand is accelerating as guided, the April event could shift the narrative for a stock that has lost significant ground over the past year.
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