HP Inc. (HPQ) is gearing up for a boost in sales thanks to a couple of key factors: the AI PC and the upcoming Windows refresh cycle. The computer giant reported a stabilized fiscal second quarter, with sales increasing in its personal systems segment as commercial clients rush to upgrade their computers before Microsoft ends support for Windows 10 in October 2025.
HP CEO Enrique Lores explained that the upgrade cycle has led to stronger-than-expected PC demand from businesses, as companies are also replacing units that have aged during the pandemic. However, despite the positive outlook for personal systems, HP saw a decline in sales and units of its personal computers, with printer sales continuing to face challenges due to pricing pressure from competitors like Canon.
The introduction of AI PCs, such as the HP OmniBook X AI and the HP EliteBook Ultra AI, could potentially brighten the earnings outlook for HP and its rival Dell (DELL). These new computers feature faster processors to handle AI-related applications, which are becoming increasingly popular in the tech industry.
Lores predicts that AI PCs will make up about 10% of PC sales in 2024, ramping up to 60% in three years. Despite some challenges in the printer business, HP’s overall performance in the second quarter was in line with expectations, with net sales of $12.8 billion and diluted EPS of $0.82.
As HP and other tech giants embrace the era of AI, the future looks promising for the computer giant as it continues to innovate and adapt to changing market trends.
