HP Inc stock ( NYSE: HPQ ) is up nearly 15% in premarket trading on Thursday after famed investor Warren Buffett revealed a sizable stake in the computer hardware company.
Berkshire now has an 11% stake in HP Inc
Buffett’s Berkshire Hathaway Inc now owns 11% of HP Inc – a stake worth $4.20 billion, confirmed a filing last night.
The announcement comes at a time when Wall Street expects demand for computer hardware to slow down following a COVID-driven surge. In a recent note, Morgan Stanley’s Erik Woodring said:
We believe PC and consumer hardware spending will be pressures as supply improves and demand normalises after two years of above-trend growth.
His investment, however, indicated that Buffett, for one, continues to see value in HP Inc.
HP announced a $3.30 billion acquisition last week
Buffett started loading up on HP shares after the American multinational disclosed a $3.30 billion deal to buy Poly – a California-based communications equipment company. Commenting the news, Evercore ISI’s Amit Daryanani wrote:
HP is committed to one of the largest share-repurchase programs, relative to its market cap, within our coverage. So, Berkshire’s involvement makes sense. We view Berkshire buying HPQ shares as a positive that validates HPQ’s strategy/deep value.
Owning 120.95 million shares in total, Berkshire is now the largest shareholder of HP Inc. In its latest reported quarter , HPQ handily topped Wall Street expectations. The stock price is now back to where it started the year 2022.
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