HP Flags Double-Digit PC Shipment Decline as Memory Chip Volatility Persists

HP warned on Tuesday that memory-chip price volatility is likely to persist into next year, forecasting a double-digit decline in PC shipments and pushing its shares down about 6% in extended trading.

The personal devices maker said it expects adjusted profit for fiscal 2026 (ending October 31) to come in at the lower end of its guidance citing rising component costs and ongoing industry-wide pressures.

HP, like rivals such as Dell Technologies, is grappling with higher memory costs as AI data centre buildouts absorb a growing share of global chip supply. The company said it has responded by adjusting its supply chain and raising prices, including to offset the impact of U.S. tariffs introduced under President Donald Trump.

“With just one quarter behind us in a dynamic environment marked by increasing memory costs, we are holding our outlook for the year, yet currently anticipate results to be closer to the low end of our range,” HP Chief Financial Officer Karen Parkhill said.

AI PCs and Premium Mix Support Near-Term Results

Despite the cautious outlook, HP struck a more optimistic tone on near-term demand, particularly in Europe and Asia, supported by the ongoing Windows 11 upgrade cycle and a shift toward commercial and premium consumer devices.

The company also reported a moderate pull-forward in customer demand during the first quarter, especially in its consumer business, which grew 16% year-on-year. Adoption of AI-powered PCs continued to accelerate, accounting for more than 35% of total PC shipments in the quarter, up from 30% in the previous period.

These factors helped HP beat Wall Street estimates for first-quarter results. Revenue rose 6.9% to $14.44 billion, ahead of analysts’ expectations of $13.94 billion, while adjusted profit came in at 81 cents per share, topping estimates of 76 cents.

Revenue from HP’s personal systems unit, which includes consumer and commercial PCs, climbed 11% to $10.25 billion, while its printing segment declined 2% to $4.19 billion.

Tariffs Add Uncertainty, Outlook Remains Cautious

HP said it is still evaluating the impact of newly announced U.S. tariffs but does not expect an immediate hit to its business. Interim Chief Executive Bruce Broussard told analysts the company would continue engaging with the administration on trade issues.

For the second quarter, HP forecast adjusted earnings of 70–76 cents per share, compared with analysts’ estimates of 74 cents.

While AI PCs and premium devices are providing some resilience, HP signaled that memory shortages, tariff uncertainty, and industry-wide shipment declines are likely to weigh on performance through the next fiscal year.