HP Prints Solid Q3, Analysts Expect It To Ride AI PCs Into 2026

HP reported solid Q3 results, with revenue of $13.9 billion and EPS of $0.75 meeting expectations, easing investor concerns over PC market slowdowns and print margin pressures while maintaining its full-year outlook. JPMorgan subsequently reaffirmed an Overweight rating and raised its price target to $30, attributing HP's momentum to 25% AI PC adoption, Windows 11 refresh cycles, and supply chain diversification driving Personal Systems margin expansion. The company also maintained stable Print margins and reiterated strong FY25 free cash flow guidance of $2.6–$3.0 billion, indicating reduced downside risks and continued strategic execution.

Analysis

HP Inc. demonstrated operational resilience in its fiscal third quarter, delivering revenue of $13.9 billion and EPS of $0.75, which met consensus estimates and allayed market fears regarding a PC market slowdown and print margin erosion. The results prompted a bullish reaffirmation from JPMorgan, which raised its price target to $30, citing a confluence of positive catalysts. A key driver is the rapid adoption of AI PCs, already constituting 25% of the sales mix and expected to fuel a refresh cycle alongside Windows 11 upgrades. Furthermore, HP has successfully expanded its Personal Systems (PS) margins sequentially through strategic pricing and supply chain diversification from China, with more gains anticipated in Q4. The Print segment also showed stability, maintaining a 17.3% margin and guiding towards the upper end of its target range, effectively navigating competitive and tariff pressures. The company’s reiterated full-year outlook and robust FY25 free cash flow guidance of $2.6–$3.0 billion underscore a reduced risk profile and solid execution.

Key Decisions for Investors

• Given the combination of met earnings expectations, a positive analyst outlook from JPMorgan with a $30 price target, and identified growth drivers in AI PCs, the stock presents a compelling case for a bullish stance or position increase.
• Investors should closely monitor the continued margin expansion in the Personal Systems segment and the sales momentum of AI PCs, as these are the core pillars of the reaffirmed investment thesis.
• While the Print division is currently performing well, it is prudent to track its margin stability against the backdrop of a structurally declining market and persistent competitive and tariff headwinds.