HP Inc. Investor Meeting Highlights: AI PC penetration is rising, but overall demand and Print margins remain under pressure

Overview

This report summarizes key points from Goldman Sachs' HP Inc. investor group meeting held in New York on July 9, 2026, with Investor Relations lead Alok Juyal. Discussion focused on the Personal Systems margin bottoming-and-recovery path, AI PC penetration, corporate IT budget pressure, Print business margins, and potential tariff refunds.

Core views

Goldman Sachs' core view is cautious. HPQ's Personal Systems margins remain constrained in the short term by input costs and supply constraints, but management expects F4Q26 to be the trough and expects more operating benefit to be released in F2027 from execution improvements and cost cuts. AI PCs should be accretive to both revenue and gross margin, with gross margins several hundred basis points higher than non-AI PCs, but AI-agent workflows and edge computing use cases are still in early stages, and the demand lift to total PC demand is difficult to quantify. On the Print side, shifting the hardware mix toward higher-ROI categories supports long-term profitability but dampens near-term margins, while HPQ also faces price competition from Japanese printer makers.

Analysis framework

The report is presented in investor meeting minutes format and combines management commentary, divisional margin targets, shipment mix, industry demand assumptions, and Goldman Sachs' existing valuation framework to explain the basis for maintaining the Sell rating and $19 target price. The target price is based on a 6.0x multiple of Goldman Sachs' NTM+1Y EPS estimate.

Methodology notes

• Valuation methodsNTM+1Y EPS multiple

  6.0x NTM+1Y EPS

  Goldman Sachs states that HPQ's 12-month target price of $19 is based on a 6.0x valuation of its NTM+1Y EPS forecast.

• factor_modelGS Factor Profile

  Growth, Financial Returns, Multiple, Integrated percentile

  GS Factor Profile compares each stock against the market and sector peers across growth, financial returns, valuation multiple, and integrated percentile to provide context for investment judgment.

• event_frameworkM&A Rank

  M&A probability scoring from 1 to 3

  Goldman Sachs scores the probability of a company becoming a take-private target from 1 to 3; 1 indicates high probability, 2 medium probability, and 3 low probability, and it is generally not included in the target price.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• HP Inc. (HPQ.US)

  subject_company

  Strengths

  AI PC is accretive to both revenue and margins, with AI PC shipment share rising to 44% in the most recent quarter. Personal Systems has four margin relief levers: supply assurance, process optimization, cost reductions, and pricing actions. High-margin peripherals and software collectively contribute over one-third of Personal Systems gross profit.

  Weaknesses

  Industry PC unit demand remains weak, and C2027 industry TAM is modeled as declining by high single digits; Print margins in the short term are pressured by the hardware mix and competition; consumer PC demand is more price sensitive.

  Comparison

  Enterprise and high-end PC customers are less price elastic than expected because they have a necessity to refresh equipment and adopt AI-capable hardware; consumer PCs remain closer to historical pricing elasticity. Japanese printer makers are using a weak yen to compete aggressively on price.

  Risks

  If PC demand, input-cost pressure, PC share, office and consumer demand, or Print growth-oriented businesses prove better than expected, this would create upside risk to the Sell call.

Key data

• RatingSellGoldman Sachs maintained its HPQ Sell rating.
• 12-month target price$19Based on 6.0x NTM+1Y EPS.
• disclosed price$24.13The HP Inc. price disclosed in company-specific regulatory disclosure.
• Personal Systems target margin5%-7%The company target range, which management expects to recover back to from the F4Q26 trough.
• AI PC shipment share44%Proportion of AI PCs in HPQ's total shipment mix in the most recent quarter, up from 35% in the prior quarter.
• F2027 AI PC shipment mix target60%-70%Management expects AI PCs to reach this mix range in F2027.
• C2027 industry PC unit TAM assumptiondown high single digits%HPQ still models C2027 industry PC unit shipments in a scenario of high-single-digit declines.
• Print long-term margin range16%-19%HPQ expects F3Q26 Print margins to be at the lower end of the long-term range.
• Tariff and supply-chain restructuring costs~$500 millionHPQ has submitted a refund application for part of this amount, and the filing has been accepted by U.S. Customs.

Impact & implications

For investors, the positive factors for HPQ are improving AI PC mix, stronger-than-expected pricing resilience on the enterprise side, and a recovery path for Personal Systems margins in F2027. The negative factors are that total industry PC demand may still decline, corporate CIO budgets may continue to shift toward AI infrastructure, Print margins remain under short-term pressure, and the timing and P&L impact of tariff refunds remain uncertain. Overall, the meeting highlights support gradual margin recovery but are not sufficient to change Goldman Sachs' Sell view.

Risks

• Industry PC demand beats expectations, which could improve HPQ's revenue and margin outlook.
• Input-cost pressure on margins is less severe than expected, potentially accelerating Personal Systems recovery.
• HPQ gains market share in high-margin categories such as gaming PCs and peripherals.
• Recovery in office and consumer demand improves performance in printer and peripheral categories.
• Print mix shifts toward larger-cartridge systems, Instant Ink, Instant Paper, HP+, and industrial printing growth opportunities, improving long-term profitability.
• A faster recognition of part of the approximately $500 million tariff and supply-chain restructuring cost refund could benefit cash flow or the income statement.

What to watch

• Whether F4Q26 Personal Systems EBIT margin bottoms as management expects.
• The actual contribution of F2027 operating leverage, cost cuts, and supply assurance to margin recovery.
• Whether AI PC shipment share can rise from 44% to 60%-70%, and whether it genuinely expands industry TAM.
• Whether corporate CIO budgets rebalance across AI infrastructure, memory supply, and endpoint upgrades.
• Whether F3Q26 Print margins stay at the lower end of the 16%-19% long-term range, and whether hardware mix strategy supports follow-on consumables and services profits.
• The final amount, cash collection timing, and accounting treatment of tariff refunds.