HP Inc. (NYSE: HPQ) shares surged 15.3% to close at $25.24 on Friday, marking their largest single-day gain in months. The rally was fueled by strong quarterly results from Lenovo, which sent positive signals across the PC hardware sector. Trading volume reached approximately 48.7 million shares, well above average.
U.S. equity markets will be closed on Monday, May 25, for the Memorial Day holiday. HP is scheduled to report its fiscal second-quarter earnings after the market closes on Wednesday, May 27, followed by a conference call at 2:30 p.m. Pacific time. The shortened trading week means investors will have to wait until Tuesday's reopening to adjust positions ahead of the print.
Lenovo reported quarterly revenue of $21.6 billion, significantly exceeding analyst expectations of $18.7 billion. Sales in its core PC, tablet, and smartphone segment rose 24% year-over-year. However, CEO Yang Yuanqing cautioned about a 'heavy shortage' in memory chips, with costs rising rapidly. This dynamic presents both opportunities and challenges for HP, as stronger PC demand could be offset by higher input costs.
The market read-through from Lenovo's results suggests that PC demand is holding up better than previously feared. HP's own fiscal first-quarter revenue grew 6.9% to $14.4 billion, with the Personal Systems segment jumping 11%. Interim CEO Bruce Broussard highlighted 'continued momentum in AI PCs,' a category that uses specialized chips to handle artificial intelligence tasks locally rather than in the cloud. CFO Karen Parkhill noted that full-year results are expected near the 'low end' of guidance, citing higher memory costs.
AI PCs have become a key focus for investors, as they could drive a new upgrade cycle after a prolonged post-pandemic slump. However, HP warned in February that memory chip volatility would persist and that PC unit shipments could decline by double digits in fiscal 2026. The company also faces headwinds from tariffs and supply-chain disruptions, which it has addressed through pricing adjustments.
Friday's rally was part of a broader tech sector upswing. Dell Technologies climbed 17% to a record high, while the S&P 500 posted its eighth consecutive winning week. James St. Aubin, Chief Investment Officer at Ocean Park Asset Management, told Reuters that 'earnings season looked really good.'
Despite the enthusiasm, HP's stock remains a value play rather than a pure AI growth story. If management delivers a cautious outlook on Wednesday, the recent bounce could prove to be short covering rather than a fundamental re-rating. Key metrics to watch include unit shipment trends, pricing power, and margin trajectory amid rising memory-chip costs.
HP will also present at the Evercore TMT conference on June 2, providing another opportunity for leadership to address investor questions. For now, the market is on hold until Tuesday, when trading resumes and focus shifts squarely to the earnings report.
