HP Surge 12.53% On Q2 Revenue Beat

30 MeiHP Inc. (HPQ) beat Wall Street estimates for second-quarter revenue, signaling a recovery in the personal computer (PC) market as customers upgrade their systems. HP experienced a boom in sales during the pandemic and a subsequent two-year sales slump, which is now easing. The company is hoping to ride a wave of upgrades after Microsoft unveiled new AI features designed to work on a new generation of PCs. HP posted second-quarter revenue of $12.8 billion, above analysts' average estimate of $12.6 billion.

In the reported quarter, sales of HP's personal systems segment, home to its desktop and notebook PCs, rose 3% from a year ago, while its printing segment posted an 8% fall. The company now expects fiscal 2024 adjusted profit to be in the range of $3.30 to $3.60 per share, compared with its previous outlook of between $3.25 and $3.65 per share. The midpoint of the full-year range was $3.45, above analyst estimates of $3.43.

HP Inc.'s Personal Systems unit, which houses its key desktop and note PC products, jumped by 3.1% to $8.43 billion, surpassing estimates of $8.28 billion. This result also helped offset weakness at its Printing segment that analysts at Goldman Sachs linked to a soft Chinese market and increased competition.

Chief Executive Enrique Lores said that as the market recovers and new AI PCs are introduced, HP is well positioned to drive profitable growth across its business. Goldman Sachs analysts predicted that AI PCs will likely not be a "material contributor" to HP Inc's full-year 2024 returns, but they are set to drive a "5-10 percentage point" uptick in average selling prices "over time."

Technically, HPQ is overbought with a Relative Strength Index (RSI) of 85.61. The stock is up 12.62% as of the time of writing. HPQ is trading above the 200, 100 and 50- day Moving Averages (MA) respectively.