HP Inc. (HPQ) is set to report its fiscal second-quarter earnings after the market close on Wednesday, May 27, with Wall Street closely watching for signals on AI-powered PC adoption, margin pressures from rising memory costs, and an update on the company’s CEO search. The announcement comes after a dramatic 15% single-day surge in HPQ shares last Friday, triggered not by HP’s own news but by a blowout quarter from larger rival Lenovo.
Lenovo posted its fastest revenue growth in five years, with nearly 40% of revenue coming from AI-related products. The market interpreted this as a positive read-through for HP, which serves the same enterprise customers and upgrade cycles. However, the rally left HPQ still down roughly 5% year-to-date, despite the stock trading at a single-digit forward earnings multiple and offering a dividend yield close to 5%.
Analysts surveyed by FactSet expect adjusted EPS of $0.71 on revenue of $14 billion for the April-ended quarter, representing a 7.2% revenue increase but flat earnings year-over-year. The critical metric will be the AI PC mix: last quarter, about one in three HP PCs shipped with a dedicated neural processing chip. If that ratio improved, particularly on the commercial side, it could challenge the bear case. If stalled, the recent rally may prove fleeting.
Memory costs remain a major headwind. As AI infrastructure buildout accelerates, memory supply has tightened, pushing prices higher and squeezing margins. Back in February, management guided for full-year results “closer to the low end of our range.” HP and peers have implemented multiple rounds of price hikes to offset these costs, but the question now is whether those increases are beginning to dent demand. Evercore ISI’s Amit Daryanani argued that demand has been “resilient” despite the hikes, while BofA’s Wamsi Mohan warned that double-digit price increases could weigh on purchases in the second half of 2026.
JPMorgan’s Samik Chatterjee had raised his price target even before the Lenovo report, a subtle walk-back of his October 2025 downgrade, but he maintained a Neutral rating. The Wall Street consensus remains at Moderate Sell, with four Holds and four Sells, and an average price target of $18.75, implying significant upside from current levels. Options traders are bracing for a swing of 9.8% following the report.
Investors will also seek updates on the vacant CEO position. Enrique Lores stepped down in early February, and board member Bruce Broussard has been interim CEO since. Insider selling of $0.8 million with no buys in the last three months may add to caution. HPQ closed at $24.43 on May 26, down 3.2% ahead of the print.
