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HPQ Beats, AI PCs Rise, Memory Costs Pressure Margins

Been traveling, catching up on earnings. $HPQ had a double beat, and for the guide made clear that costs and mix drive the next stage, not demand. • Personal Systems did the heavy lifting: $10.25B (+11% YoY) with units up 12%. This is the Windows 11 cycle plus premium and commercial mix. • AI PCs were over 35% of shipments, up from 30% last quarter. The question is whether that translates to sustained ASP and attach, not just unit mix. Probably not. • Printing still drags the growth profile: $4.19B (-2% YoY) with hardware units down 6%. The long-term fix is more software, services, and managed print, not boxes. • Memory costs are the margin challenge: management expects volatility to persist into next year and is guiding FY26 closer to the low end. That is a cost headwind, not a Q1 demand problem. Watching: • Pass-through on memory cost in consumer PCs without losing share as promotions intensify. • Commercial refresh durability: if PC units decline double digits, mix and pricing have to do the margin work.