HP Inc. (HPQ) shares surged nearly 8% on Friday, closing at $22.68 as the stock rebounded sharply from a 1.96% decline the previous day. The rally comes as investors turn their attention to the company's upcoming fiscal second-quarter earnings report, scheduled for May 27, which will cover the quarter ended April 30.
The advance was part of a broader uptick in hardware stocks, with Dell Technologies (DELL) jumping roughly 13% and Apple (AAPL) adding close to 2% on the day. However, HP's move was particularly notable given the headwinds the company faces: rising memory-chip costs, softer printing revenue, and the ongoing challenge of proving that AI-enabled PCs can drive meaningful growth.
HP's AI PCs, which process certain artificial-intelligence tasks locally rather than relying on the cloud, have been a key focus for the company under interim CEO Bruce Broussard, who took over after Enrique Lores departed in February. The board has launched a search for a permanent chief executive. In its first-quarter results, HP reported revenue of $14.4 billion, up 6.9% year-over-year, with Personal Systems revenue climbing 11% but Printing revenue falling 2%. Broussard cited "continued momentum in AI PCs," while CFO Karen Parkhill warned of a "dynamic environment marked by increasing memory costs."
Memory costs remain a sticking point. HP has indicated that swings in memory-chip prices will persist into next year, pressuring PC shipments and margins. According to Reuters, the company expects ongoing pressure from higher memory costs, which are tied to the very AI ramp-up that is also stoking demand for more expensive hardware. This creates a delicate balancing act: HP may need to raise prices, accept lower margins, or risk losing ground to competitors like Dell and Lenovo, which are also vying for PC upgrade buyers.
Industry data underscores the competitive landscape. Gartner reported a 9.3% jump in global PC shipments for the fourth quarter of 2025, with Lenovo leading the market, HP in second place, and Dell close behind. Analyst Rishi Padhi attributed the demand uptick to the "Windows 11 upgrade cycle" but noted that heavy price cuts and promotions eventually tempered growth.
Looking ahead to the May 27 report, investors will be watching several key metrics: whether Personal Systems demand remained solid through April, whether Printing revenue can stabilize or at least not deepen its decline, and whether HP's cost controls can keep earnings steady amid rising input costs. The absence of a permanent CEO adds another layer of uncertainty, though the company's interim leadership has signaled a focus on AI PCs as a growth driver.
Friday's rally leaves the downside scenario intact. If memory costs remain elevated, HP faces tough choices that could squeeze margins or market share. The printing segment, once a reliable profit center, now lags behind the PC division in both size and strength, according to the latest figures. The May 27 report will be a critical test of whether HP can navigate these challenges and deliver on the promise of AI PCs.
