HP falls as PC shipment decline overshadows Q3 beat

Shares of PC and printer maker HP HPQ.N fell 8.27% to $28 in premarket trading.

Lower PC shipments and shrinking margins overshadowed a third-quarter revenue beat and a strong fourth-quarter forecast.

While PC unit revenue rose 18% in Q3, shipments dropped 16% as HP focused on pricier AI PCs; the segment's operating margin shrank due to rising commodity and memory chip costs.

The company posted Q3 revenue of $15.7 billion, above estimates of $14.38 billion, and forecast Q4 adjusted EPS above Wall Street estimates, with both periods helped by tariff refunds.

J.P. Morgan said investors are likely to remain cautious about elevated cost pressures heading into FY27, as those headwinds could add to concerns over whether recent strength in the PC market can be sustained as the Windows 11 upgrade cycle eases in the coming quarters.

Only 2 of 19 brokerages rate the stock "buy" or higher, 11 rate it "hold" and 6 rate it "sell" or lower; their median price target is $25, according to LSEG-compiled data.

As of the previous close, the stock was up about 37% year to date.