HP Inc. surges on PC demand forecast, refresh cycles

Shares of HP Inc. (HPQ) are jumping after the computer company posted its fiscal second-quarter earnings, beating estimates for adjusted earnings per share with gains of $0.82 per share. Yahoo Finance Executive Editor Brian Sozzi spoke with HP Inc. President and CEO Enrique Lores to discuss the report, the refresh cycle for new consumer tech, and AI PCs.

Yahoo Finance Tech Editor Dan Howley joins Catalysts to break down HP's earnings and its forecasts for the future PC demand.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino

Video transcript

Well, let's talk about shares of HPQ because they are surging after beating revenue estimates, signalling a recovery in PC demand.

Our executive editor, Brian Sazi, spoke with the CEO Enrique Lores about this.

Take a listen to what he had to say.

This is the first quarter in eight where our PC business grew and special, driven by the commercial side, both enterprise and SMB.

So we are pleased with the progress that we have seen in P CS.

And we think that this is going to continue now for the second half of the year.

All right, for more on these results Yahoo Finance's Dan Halley joining us now.

And, Dan, when you take a look at these results of the PC demand recovery really seems to be boosting sales at this point in the story.

Yes, it seems to be, uh, though on the commercial side rather than the consumer side, Uh, at least as far as as HP goes at this point.

Uh, but I, I think one of the things to to point out is, it's doing better.

Uh, the the PC industry has been in the doldrums for years.

Uh, according to, uh, I DC.

The first quarter of this year was the first time that they saw positive growth in shipments in two years, the first time that amount of growth 1.5% year over year.

And that is because the prior year shipments were so bad.

So it's an easy, uh, comparison there.

Um, so just to show you where the the PC market was now does that mean people don't want to use P CS as much?

Well, it's it's kind of complicated.

It's so a lot of people do use their smartphones.

You still need a PC for work.

Uh, and a lot of people still prefer it to do, uh, you know, the heavy lifting when it comes to work, I can type out an article, uh, on the train on my phone, but I'd much rather be doing it on my laptop, uh, while being able to do some research at the same time.

The big problem was, uh, when covid kicked off, everybody started buying P CS.

Uh, because they were working from home.

Maybe they didn't, uh, have one that they could bring home.

Maybe they had a sluggish one that was there.

That they wanted to just get rid of and get a nice new one, since they were going to be using it for a while.

So everybody went out and purchased the And now we're hitting that that four year mark and people are starting to get into their upgrade cycle.

So for a while, nobody really needed computers because they all kind of upgrade at the same time.

Now that's starting to come around.

It's also the end of, uh, of Windows 10, uh, Microsoft really pushing Windows 11 and Oh, yeah, Michael Microsoft also pushing their A i PC initiative.

They call it, uh, copilot plus P CS.

And they have companies like HP, Dell, Lenovo, Asus and Acer as well as Samsung behind them.

And so that's, uh, potentially going to help push a cycle going.

I think one of the things to to really point out, though, uh, is the, uh, introduction of qualcomm chips to this, uh, whole menagerie of options that P CS offer, especially when it comes to laptops.

Uh, according to Microsoft, at least, uh, during their event, uh, build last week, the, uh, Qualcomm equipped P CS that are hitting the market laptops are gonna beat out Apple's M three equipped air in terms of both power and performance.

So it'll have the battery life, and it'll have the performance to beat out Apple's M three.

Now I use an M one powered MacBook Pro.

I don't really have to plug it in.

Ever.

So Microsoft has, uh uh, the you can back up.

What?

What?

They've, uh, and these Qualcomm equipped, uh, units are able to run all day with great power.

Uh, and performance.

Then I think that'll help really?

Goos PC sales going forward.

Uh, I don't think it's gonna take a chunk out of Apple people.

You know, it's a ecosystem thing at this point.

Uh, but when it comes to actual, uh, PC sales, uh, I, I think that could give them AAA real boost.

All right, Dan.

Halley, thanks so much for bringing that down for us here.