Core Insights - Dell Technologies (DELL) and HP (HPQ) are significant players in the personal computer market, with DELL focusing on a broader enterprise portfolio and HP concentrating on consumer PCs and printers [1] - The PC market is projected to grow from $222.64 billion in 2025 to $344.13 billion by 2030, at a CAGR of 9.1% [2] - The global PC market is expected to see a shipment growth of 4.1% in 2025, reaching 274 million units [3] Dell Technologies - DELL's AI prospects are strong, with expansion into enterprise deployments and edge computing [4] - The company has introduced new high-performance notebooks and desktops, enhancing productivity for enterprise customers [5] - DELL is benefiting from a PC-refresh cycle, with first-quarter fiscal 2026 CSG revenues at $12.50 billion, up 5% year over year, and commercial client revenues increasing 9% to $11.04 billion [6] - DELL's partnerships with companies like NVIDIA and Microsoft are enhancing its AI capabilities and enterprise AI adoption [7] HP Inc. - HPQ is focusing on innovative product launches, with a growing interest in generative AI-enabled PCs expected to drive demand [8] - The company forecasts that 40-60% of all PCs will be AI PCs in the next three years, launching several AI PCs this year [9][10] - HPQ's reliance on China for manufacturing poses risks if U.S.-China tariffs escalate, potentially impacting margins [11][12] Stock Performance and Valuation - Year-to-date, DELL shares have lost 2.9% and HPQ shares have lost 22.2%, attributed to a challenging macroeconomic environment [13] - DELL shares are trading at a forward Price/Sales ratio of 0.74X, while HPQ's is at 0.43X, indicating that both stocks are currently undervalued [16] - The Zacks Consensus Estimate for DELL's fiscal 2026 earnings is $9.25 per share, reflecting a 13.64% year-over-year increase, while HPQ's estimate for fiscal 2025 is $3.09 per share, indicating an 8.58% decline [19] Conclusion - Both DELL and HPQ are positioned to benefit from the PC market's growth, but DELL has stronger AI momentum and a diversified portfolio, making it a more attractive investment opportunity [20] - HPQ's dependence on China for manufacturing amid geopolitical tensions is a significant challenge [21]

Financial Data and Key Metrics Changes - The company reported a 5% increase in revenue in constant currency year over year, marking the fourth consecutive quarter of revenue growth [8][22] - Non-GAAP operating profit fell short of expectations due to additional tariff costs, impacting earnings per share by approximately $0.12 [9][22] - Gross margin decreased to 20.7% year over year, influenced by increased tariff and commodity costs [23] Business Line Data and Key Metrics Changes - Personal Systems revenue grew 8% in constant currency, driven by strong commercial performance, with commercial revenue increasing by 9% year over year [10][25] - Print revenue declined 3% in constant currency, with growth in Europe offsetting a slowdown in North America and weak demand in China [12][27] - The company achieved strong growth in consumer subscriptions and industrial graphics within the print segment [13][28] Market Data and Key Metrics Changes - Revenue growth was observed across all regions, with APJ growing 9%, Americas growing 5%, and EMEA growing 1% in constant currency [23] - The company expects the PC market to grow low single digits for the second half of the year, influenced by macroeconomic uncertainties [19][31] Company Strategy and Development Direction - The company is diversifying its manufacturing locations to mitigate geopolitical risks, with plans for nearly all products sold in North America to be built outside of China by June [9][10] - The focus remains on executing the Future Ready Accelerated Plan, aiming for at least $2 billion in gross annual run rate structural savings by the end of fiscal year 2025 [19][28] - The company is committed to leveraging AI to enhance productivity and employee satisfaction, with a comprehensive AI PC portfolio introduced [14][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic geopolitical landscape and its impact on operating profit, emphasizing the need for cost management and pricing actions [22][23] - The company remains confident in its ability to navigate market uncertainties and achieve long-term sustainable growth [20][34] - Future growth is expected to be driven by strong demand in commercial PCs and the adoption of AI PCs [19][31] Other Important Information - The company returned approximately $400 million to shareholders through dividends and share repurchases [30] - Free cash flow was slightly negative due to timing of payments related to inventory actions taken for tariff mitigation [29][30] Q&A Session Summary Question: Expectations for the PC market in the second half of the year - Management noted strong demand in Q2 but adopted a more prudent outlook for the second half due to economic conditions and price increases [38][39] Question: Size and growth of growth businesses - Growth businesses are performing well, with AIPCs expected to represent over 25% of the PC business by year-end [45][46] Question: Personal Systems margins for the full year - Margins are expected to be in the 5% to 7% range for the full year, likely in the lower half due to Q2 impacts [51][52] Question: AI PCs and their impact on growth - AI PCs are anticipated to drive growth, with significant software support from ISVs [60][62] Question: Mitigation actions for tariff impacts - The company has accelerated the shift of factories out of China and implemented pricing actions to offset tariff costs [70][73]

Financial Performance - HP's net revenue was $1322 billion, up 3% year-over-year and 5% in constant currency[15] - Non-GAAP diluted net earnings per share were $071, below the outlook of $075 to $085[15] - GAAP diluted net earnings per share were $042, below the outlook of $062 to $072[15] - Free cash flow was $(95) million[15] - HP returned $04 billion to shareholders through dividends and share repurchases[15] Segment Performance - Printing net revenue was $4181 billion, down 43% year-over-year (down 26% in constant currency), with an operating profit of $814 million (195% OP margin)[21] - Personal Systems net revenue was $9024 billion, up 71% year-over-year (up 81% in constant currency), with an operating profit of $409 million (45% OP margin)[21] - Americas accounted for 44% of net revenue, with 36% from the US[18] - Non-US net revenue accounted for 64% of total net revenue[19] Personal Systems Details - Personal Systems revenue increased 7% year-over-year, driven by higher commercial volume and increased ASPs[30] - Commercial Personal Systems revenue grew 9%, reflecting refresh activity related to Windows 11[34] - Total Personal Systems units were up 6% year-over-year, with commercial units up 11% and consumer units down 2%[35] Printing Details - Printing revenue decreased 4% year-over-year (down 3% in constant currency)[36] - Printing supplies revenue was down 5% year-over-year (down 3% in constant currency)[43] - Total hardware units were up 1% year-over-year[43] Outlook - HP revised its FY25 GAAP diluted net EPS guidance to $232-$262 and non-GAAP diluted net EPS guidance to $300-$330[62] - HP revised its FY25 free cash flow guidance to $26-$30 billion[62]