HP Shares Drop 6% Despite Earnings Beat as Cost Cuts and AI-Driven Chip Prices Bite
HP Inc. reported better-than-expected Q4 earnings but faced a 6% stock drop after announcing workforce reductions and warning of rising memory chip costs tied to AI demand. The company will cut 4,000-6,000 jobs (10% of workforce) by 2028, while surging chip prices are projected to shave 30 cents per share off fiscal 2026 earnings.
PC revenue grew 8% to $10.4B, offset by a 4% printer segment decline to $4.3B. Full-year guidance of $2.90-$3.20/share missed analyst expectations of $3.33, with U.S. trade regulations compounding operational costs.
The tech giant's restructuring comes amid broader sector pressures: HPQ shares have fallen 25% YTD versus the S&P 500's 15% gain, reflecting investor skepticism about growth prospects in a tightening cost environment.
