PALO ALTO, August 27, 2026, 06:49 EDT — HP (HPQ) shares dropped 10.6% in premarket trade after the company reported that global PC shipments declined 16%, erasing $3 billion from its market value.
- HP stock dropped 10.62% to $27.28 during premarket trade at 06:44 EDT.
- Shipments of personal computers fell 16%, but revenue from the segment increased by 18%.
- The suggested $2.96 billion decrease in value comes close to the company’s annual free-cash-flow projection.
HP Inc. (NYSE:HPQ) shares slid $3.24, or 10.62%, to $27.28 ahead of Thursday’s session. The move came as investors weighed a 16% decline in personal-computer shipments and ongoing margin pressures following record quarterly revenue.
The decline wiped out about $2.96 billion in equity value, based on a $3.24 drop across 914.52 million shares outstanding. This loss is equivalent to 95.6% of HP’s projected $3.1 billion midpoint for full-year free cash flow.
Revenue increased by 12.5% to $15.7 billion, surpassing the LSEG forecast of $14.38 billion by $1.32 billion. Adjusted earnings stood at 83 cents per share, above the projected 69 cents. However, most of the gains were driven by higher prices.
Personal Systems revenue rose 18% to $11.8 billion. Unit shipments dropped 16%, with consumer units down 19%. The segment’s operating margin decreased to 4.6% from 5.2% in the previous quarter.
| Metric | Fiscal Q3 2026 | Comparison |
|---|---|---|
| Net revenue | $15.7 billion | 12.5% higher than a year earlier |
| Adjusted EPS | $0.83 | LSEG expected $0.69 |
| Personal Systems revenue | $11.8 billion | Up 18% from the previous year |
| PC unit shipments | Off by 16% | Consumer segment declined 19% |
| Personal Systems margin | 4.6% | 5.2% seen in fiscal Q2 |
| Printing revenue | $3.9 billion | 2% decrease from last year |
| Free cash flow | $1.6 billion | $0.8 billion posted in fiscal Q2 |
HP reported that increases in memory and other commodity costs surpassed its hikes in prices. Chief Financial Officer Karen Parkhill anticipates these elevated costs will continue to weigh on fourth-quarter revenue, leaving it below typical seasonal trends. The company does not foresee a rebound in Personal Systems margins before fiscal 2027.
The guidance headline should be updated as well. HP projects fourth-quarter adjusted earnings in the range of 69 to 79 cents. The midpoint of 74 cents surpasses the consensus estimate of 67 cents. But the forecasted range factors in an estimated eight-cent benefit from a tariff refund. Without this, the midpoint falls to 66 cents.
Refunds from tariffs added 11 cents to the 83 cents in adjusted earnings for the quarter. They make up 19 cents of HP’s updated full-year guidance of $3.19 to $3.29. This advantage represents 5.9% of the $3.24 midpoint.
HP reported steady cash generation, delivering $1.6 billion in free cash flow for the quarter. The company distributed $574 million via dividends and buybacks, and finished July holding $4.2 billion in gross cash.
Printing provided minimal relief. The segment posted a 2% decrease in revenue to $3.9 billion. Supplies revenue slipped 3%, while hardware unit sales were down 7%. Printing’s margin held at 18.1%, well above the margin seen in the PC segment.
Wall Street approached Thursday with caution. Seventeen analysts maintained a hold consensus and set an average price target of $27.88, which represents a 2.2% premium over the premarket price. On Thursday, Goldman Sachs increased its target to $22, while UBS set its target at $28.
Risks: HP’s stock might rebound should higher prices offset memory expenses or if unit demand steadies. Additional cost pressures could undo these gains. A further slip in margins would mean the boosted earnings outlook relies even more on one-off tariff refunds.
The next key indicator will be the Personal Systems margin for the fourth quarter. Investors are also looking to see if HP is able to achieve year-over-year revenue growth, factoring out the effects of price inflation and refund benefits.
