HP Shares Drop 10% Despite Revenue Growth and AI Demand

HP Inc. reported third-quarter revenue of $15.7 billion, representing a 12.5% to 13% increase from the previous year. This growth exceeded analyst estimates and was driven by strong demand for AI-optimized PCs and a 22% surge in commercial model sales. The company raised its annual adjusted earnings per share forecast to a range of $3.19 to $3.29.

Despite the revenue gains, shares declined approximately 10% in extended trading. Investors reacted to a 16% decline in personal computer unit shipments, suggesting that price hikes implemented to offset a global memory chip shortage caused sticker shock among consumers. Printing revenue also decreased 2% to $3.9 billion.

Financial results were significantly bolstered by tariff refunds from the Donald Trump administration following a Supreme Court of the United States ruling that struck down certain duties. Analysts noted that without these refunds, the company's fourth-quarter outlook would have missed estimates. HP's strategy of increasing device prices to manage rising costs mirrors actions taken by competitors including Dell Technologies, Apple, and Lenovo Group.