Should You Hold on to HPQ Stock Despite its 16% Decline in a Month?

Core Viewpoint - HP Inc. (HPQ) has experienced a 16.1% decline in share price over the past month, underperforming the Zacks Computer and Technology sector, which returned 3.3% [1] Group 1: Reasons for Underperformance - HPQ's recent decline is attributed to a broader tech pullback due to fears of an escalating tariff war and slowing economic growth [4] - The announcement of new U.S. tariffs on April 2 is expected to raise costs for hardware imports from China, negatively impacting demand for PCs and HP's margins, particularly in the Personal System segment [5] Group 2: Market Performance - The global PC market saw a 4.9% year-over-year increase in shipments in Q1 2025, totaling 63.2 million units, driven by strategic stockpiling ahead of new tariffs [6] - All top five vendors, including HP, experienced year-over-year growth in PC shipments, with HP's shipments increasing by 6.1% [7] Group 3: Future Prospects - Improvement in commercial PC demand is expected to support HPQ amid challenging macroeconomic conditions, driven by businesses refreshing PCs ahead of the end of Microsoft's Windows 10 support in October 2025 and rising interest in AI-equipped PCs [9][10] - The AI personal computers market is projected to grow at a CAGR of 28.82% from 2024 to 2030, presenting growth opportunities for HPQ [11] Group 4: Product Innovations - HPQ has launched a range of innovative AI-driven products, including various models of AI PCs and intelligent print technology, to capitalize on the growing AI market [12][13] Group 5: Investment Outlook - Despite the challenges posed by tariff pressures, HPQ's solid PC shipment growth and proactive AI strategy position the company well for recovery, suggesting that holding HPQ stock may be a prudent choice for long-term investors [14]