HP Warns on 2026 Forecast Due to Chip Costs, Tariffs

HP Projects Lower-End 2026 Results

HP Inc. announced it expects fiscal 2026 results to land at the low end of its forecasts, citing pressures from U.S. trade regulations and escalating memory chip costs. The news prompted an approximate 7% decline in its shares during extended trading.

Overall Situation and Performance

The personal computer manufacturer faces a challenging market where high demand for AI infrastructure is straining the global memory chip supply. Despite these headwinds, HP surpassed Wall Street estimates for its first-quarter revenue and profit, buoyed by the adoption of AI-powered PCs and the ongoing Windows 11 upgrade cycle.

Economic and Market Impact

For the first quarter, HP reported a 6.9% revenue increase to $14.44 billion, beating the consensus estimate of $13.94 billion. Adjusted profit was 81 cents per share, exceeding the 76-cent expectation. The company’s Personal Systems unit revenue grew 11%, while its Printing segment saw a 2% decline.

Summary and Outlook

While maintaining its full-year guidance, HP's leadership expressed caution due to the dynamic environment. The company forecast second-quarter adjusted profit per share to be between 70 cents and 76 cents, aligning with analyst estimates of 74 cents.

**FAQ**

Q: Why did HP issue a cautious forecast for 2026?
A: The forecast was influenced by rising memory chip costs and uncertainties related to U.S. trade regulations and tariffs.

Q: How did HP's stock react to the announcement?
A: HP's shares fell by approximately 7% in extended trading following the news.

Source: Investing.com