HP Inc. Raises Prices Amid AI-Driven Component Shortages

HP Inc. reported third-quarter revenue of $15.67 billion, exceeding analyst expectations and prompting the company to raise its full-year guidance for free cash flow and earnings per share. The company is accelerating share buybacks and maintaining a 3.9% dividend yield despite facing margin contraction and cost pressures.

Chief Financial Officer Karen Parkhill announced that the company will continue to increase product prices to offset a global memory and storage shortage caused by AI data center expansion. Memory components are projected to make up 35% of the bill of materials this year, a significant increase from the previous 15-18%. While input costs are expected to rise into fiscal year 2027, Parkhill noted that the rate of increase should slow.

These pricing strategies helped drive an 18% revenue increase in the personal systems segment to approximately $11.8 billion, fueled by premium categories and AI PCs, even as unit shipments dropped by 16%. Meanwhile, interim CEO Bruce Broussard confirmed that the search for a permanent successor to Enrique Lores, who departed in February to lead PayPal, remains ongoing.