HP's PC Boom Is Over — One Analyst Warns A Hangover Is Coming

Core Viewpoint - HP Inc faces a challenging outlook as the boost from the Windows 10 replacement cycle ends, leading to difficult growth comparisons for the upcoming year [1][3]. Group 1: Market Conditions - A combination of slowing PC demand, a challenging economy, and rising memory costs is creating significant headwinds for HP's future revenue and profit growth [2][4]. - The Windows 10 replacement cycle, which drove strong commercial PC sales in 2025, is nearing its end, resulting in tough year-over-year comparisons for growth in 2026 [4][6]. - The current macroeconomic environment offers few incentives for consumers to initiate a new PC replacement cycle [4][6]. Group 2: Financial Projections - Analyst Samik Chatterjee downgraded HP stock from Overweight to Neutral with a price target of $30, indicating limited upside for the shares [2][7]. - Chatterjee forecasts only low-single-digit revenue growth and modest earnings growth for HP in fiscal year 2026 [7]. - Projected fourth-quarter revenue is $15.14 billion with an EPS of 93 cents [7]. Group 3: Cost Pressures - Rising memory costs are expected to squeeze HP's profit margins, as weak demand makes it difficult to pass these costs onto customers [5][6]. - While near-term revenue and earnings forecasts are raised due to a stronger-than-expected upgrade cycle in 2025, this creates a double-edged sword for future growth [5][6].