HP jumps 8% before Q2 results as AI PC bets confront memory cost headwind

HP shares climbed roughly 8 per cent on Friday, closing at $22.68, as investors bid up the stock ahead of the company’s 27 May fiscal second-quarter earnings report and rival Dell Technologies surged on its own AI-driven optimism.

The rally followed a 1.96 per cent decline on Thursday that snapped a two-day winning streak. Dell Technologies rose roughly 13 per cent on the same day. The broader S&P 500 and Dow Jones Industrial Average both finished lower.

HP reports results for the quarter ended 30 April on 27 May. In the previous quarter, revenue reached $14.4bn, up 6.9 per cent from a year earlier, with the Personal Systems segment, which includes PCs, climbing 11 per cent to $10.3bn. Non-GAAP diluted earnings per share hit $0.81. The printing division was the weak spot, with revenue down 2 per cent to $4.2bn, a trend investors will watch closely in the Q2 print.

Interim chief executive Bruce Broussard, who took the role in February after Enrique Lores departed, told investors in the first-quarter release that HP saw continued momentum in AI PCs. The company said AI-capable machines accounted for more than 35 per cent of total PC shipments in the first quarter, up from 30 per cent previously, as enterprises and consumers bought hardware that runs AI workloads on-device rather than relying on the cloud.

That demand story runs into cost pressure. Chief financial officer Karen Parkhill flagged a dynamic environment marked by increasing memory costs in the February earnings call. HP’s full-year guidance pointed toward the lower end of its non-GAAP EPS range of $2.90 to $3.20 and free cash flow of $2.8bn to $3.0bn. The company has since warned that swings in memory chip prices will drag on into next year, according to a company statement cited by TechStock².

HP faces three choices: raise prices to protect margins and risk losing unit share, absorb the memory cost hit, or cede ground to Lenovo and Dell, both of which are pushing into the same AI PC category. A board search committee is hunting for a permanent chief executive to replace Broussard, a layer of leadership uncertainty before the 27 May print.

Global PC demand is a tailwind. Gartner reported that worldwide PC shipments rose 9.3 per cent in the fourth quarter of 2025, driven by the Windows 11 upgrade cycle as the October 2025 Windows 10 end-of-support deadline forced enterprises to refresh fleets. Analyst Rishi Padhi of Gartner attributed the strength to enterprise refresh cycles but noted that aggressive pricing from manufacturers has compressed margins. HP ranks second in global PC market share behind Lenovo and ahead of Dell, according to Gartner data.

The 27 May report will show whether AI PC demand can offset the memory cost headwind. Investors will watch for the updated full-year outlook, any change to the interim leadership timeline, and whether the printing division stabilises after posting a 2 per cent revenue decline to $4.2bn in the first quarter. The board has not indicated when it expects to name a permanent CEO.