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]

Q2 FY25 Earnings Announcement May 28, 2025 Forward-looking Statements This presentation contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries ("HP") which may differ materially from those expressed orimplied by such forward-looking statements and assumptions. A ...