HP posted income of $14.4 billion in its fiscal second quarter of 2026 – up 9% year-over-year – delivering non-GAAP EPS of $0.86, nicely forward of analyst estimates of $0.71.
The outcomes, pushed by surging demand for AI-optimised PCs and a seamless Home windows 11 refresh cycle, marked the corporate’s eighth consecutive quarter of top-line development. Shares jumped as a lot as 15% in after-hours buying and selling.
The outcomes come towards a backdrop of rising commodity prices, a management transition, and an accelerating shift towards AI-optimised computing on the edge.
AI PCs Take Centre Stage
The standout quantity from the decision: AI PCs now make up 44 p.c of HP’s whole PC shipments, up from 35 p.c final quarter. HP is projecting that determine will attain 60–70 p.c in fiscal 2027, climbing above 70 p.c by fiscal 2028.
Interim CEO Bruce Broussard was emphatic about what’s driving the shift. “Prospects have gotten extra considerate about the place AI workloads run,” he informed analysts, pointing to rising cloud prices, latency issues, and knowledge privateness pressures as forces pushing enterprises towards edge computing.
“Firms like HP that personal the trusted edge, the workflow context, and the orchestration layer between native and cloud intelligence will probably be positioned to thrive.”
HP’s pitch is that the PC is changing into a real AI execution platform – not only a skinny consumer for cloud providers.
Its new Z Workstations and AI Stations are designed to run inference domestically, and HP showcased an increasing ecosystem of 150+ software program companions constructing productiveness, developer, and artistic instruments round that functionality at its HP Think about occasion this quarter.
The Home windows 11 refresh cycle is including additional gas. HP famous that roughly 30% of the put in base continues to be working Home windows 10, with important improve waves nonetheless to come back in EMEA and APJ – markets that delivered fixed foreign money income development of 6 p.c and 18 p.c respectively this quarter.
Private Methods President Ketan Patel famous: “There’s intrinsic power in each industrial and shopper, pushed by Home windows 11 and AI on the edge – and that is still sturdy even for Q3 and This autumn.”
Private Methods income grew 13 p.c year-over-year total, with working revenue up 30 p.c – a standout efficiency that CFO Karen Parkhill attributed to disciplined pricing, a richer product combine, and accelerated mitigation actions on commodity prices.
The Reminiscence Crunch
Not the whole lot was easy. HP was candid a couple of worsening reminiscence and storage value atmosphere that it expects to accentuate by way of the second half of the yr.
Enter prices rose in Q2, will rise additional in Q3, and are anticipated to peak in This autumn – with Private Methods working margins forecast to hit a trough earlier than sequential enchancment heading into fiscal 2027.
Parkhill outlined a four-pillar mitigation technique: securing provide by way of long-term agreements, a tighter supply-demand planning mannequin, strategic stock positions, and differentiated repricing. “Primarily based on what we’re seeing right this moment, we’d anticipate This autumn to be a low level, adopted by sequential enchancment into subsequent fiscal yr,” she stated.
HP additionally flagged broader inflationary pressures past reminiscence – together with oil costs feeding by way of into resin and transportation prices – although the corporate described these as manageable and already factored into its outlook.
Print Holds Its Floor
Print income got here in flat year-over-year at $4.2 billion, which HP characterised as in keeping with expectations in a aggressive and structurally challenged market.
There have been real shiny spots: double-digit development in shopper subscriptions by way of the HP All-In Plan, a fifth consecutive quarter of double-digit 3D printing income development, and an eleventh straight quarter of Industrial Graphics income development.
The corporate is leaning into Tank printers to drive shopper share features, and reported continued enchancment within the workplace market over the previous three quarters – a tentative signal that enterprise print demand could also be stabilising.
Outlook and Management
HP raised its full-year non-GAAP EPS steerage to $2.90–$3.10 and guided totally free money circulation of $2.8–$3.0 billion. For Q3, the corporate expects non-GAAP EPS of $0.61–$0.71.
The one unresolved query hanging over the enterprise is the CEO search. Broussard, who stepped in as interim following the departure of Enrique Lores, confirmed that an exterior search agency is engaged and candidates are being evaluated – however declined to supply a timeline.
He described the best successor as somebody with “a confirmed observe report of making long-term worth” and the flexibility to function in “a posh and quickly altering atmosphere.”
For now, HP’s numbers converse for themselves. The AI PC narrative is gaining actual momentum, the mitigation playbook is working – and the reminiscence squeeze will check each within the months forward.
