HPQ - HP: All Eyes On An AI PC Supercycle

2024-06-02 01:38:34 ET

Summary

• HP surged after reporting strong Q2 results and citing tailwinds from AI, pushing year-to-date gains above 20%.
• The company believes that AI demand and integration with Microsoft's AI Copilot can drive a PC refresh super-cycle.
• HP's wide product lineup, high-margin printing business, aggressive shareholder returns programs, and consistent cash flow make it an attractive investment option.
• The stock still trades at an attractive ~10x P/E multiple.

For many years, HP Inc. ( HPQ ), the hardware segment of the former consolidated HP that has since split into HP Inc. and HP Enterprise ( HPE ), has been a forgotten stock. Investors shunned the company for its slow growth, its lagging results in PCs, and the secular decline of the printing business, which is HP's cash cow....

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