HP exceeded Wall Street expectations for its fiscal second quarter, recording stronger-than-anticipated revenue and adjusted profit as enterprise and consumer buyers gravitated to AI-capable PCs and devices aligned with the Windows 11 refresh.
For the quarter ended April 30, HP posted revenue of $14.41 billion, a 9% increase from a year earlier and ahead of the LSEG-compiled analysts' average estimate of $14.07 billion. Adjusted earnings per share came in at $0.86, topping the consensus projection of $0.71. Those results reflect elevated demand for higher-margin, AI-optimized personal computers during the transition to Windows 11.
The PC industry is operating against a backdrop of constrained memory supply. HP, alongside other major manufacturers such as Dell Technologies and China’s Lenovo Group, is contending with a scarcity of memory chips that sources attribute to increased capacity consumption from data center buildouts. That supply pressure has contributed to price increases in smartphones and personal computers, and is influencing some enterprise purchasers to choose premium devices during the Windows 11 upgrade cycle after Microsoft ended support for Windows 10 in October of last year.
HP noted the broader market environment as it outlined its strategy. "During the second quarter, we continued executing our future of work strategy through intelligent devices, edge AI, and connected experiences while navigating rising commodity costs," the company said in a statement attributed to interim CEO Bruce Broussard. The "future of work" emphasis centers on AI-enabled PCs, hybrid work solutions and workplace software.
Last week, rival Lenovo reported a better-than-expected 27% increase in fourth-quarter revenue, a performance HP referenced as evidence of robust consumer demand for PCs ahead of anticipated price increases, which helped the industry leader expand market share.
On guidance, HP now expects fiscal 2026 adjusted earnings per share in a range of $2.90 to $3.10, versus its prior projection of $2.90 to $3.20. For the third quarter, the company forecast adjusted EPS between $0.61 and $0.71; the mid-point of that range sits slightly above analyst estimates of $0.64.
Investors and market participants will be watching how persistent memory shortages and commodity inflation influence pricing and mix across devices, and whether the Windows 11 upgrade cycle continues to drive upgrades to premium, higher-margin hardware.
Key points
- HP reported Q2 revenue of $14.41 billion and adjusted EPS of $0.86, both above LSEG estimates - impacting PC hardware and enterprise IT markets.
- Supply constraints for memory chips, driven by data center buildouts, are tightening capacity and lifting prices for smartphones and PCs - affecting semiconductors and device makers.
- HP narrowed fiscal 2026 adjusted EPS guidance to $2.90-$3.10 and forecast Q3 adjusted EPS of $0.61-$0.71, with the mid-point modestly above analyst expectations.
Risks and uncertainties
- Ongoing memory chip shortages could limit unit shipments or raise costs for PC and smartphone makers - a risk to device manufacturers and semiconductor suppliers.
- Rising commodity costs may compress margins if HP and peers cannot fully pass through higher input prices - relevant to PC vendors and enterprise purchasers.
- Dependence on the Windows 11 refresh cycle as a demand driver introduces timing risk if upgrade activity slows compared with current levels - impacting IT procurement and PC sales.