HP Raises Outlook as Premium AI PCs and Tariff Refunds Boost Results

HP raised its annual outlook after record Personal Systems revenue, premium product mix, pricing actions and tariff refunds boosted third-quarter results.

The company expects an additional tariff-refund benefit in the fourth quarter, but its guidance increase excludes that benefit.

Demand is shifting toward premium AI PCs, workstations and hybrid AI solutions that run workloads locally and in the cloud.

HP expects Personal Systems margins to dip in the fourth quarter before gradually returning to its long-term 5%–7% range in fiscal 2027.

HP is expanding growth initiatives in Print, including Big Tank, industrial and 3D printing, while Big Tank gained four points of market share.

Print margins are expected at the low end of the 16%–19% target range due to unit placements and higher input costs.

HP Chief Financial Officer Karen Parkhill said the company’s third-quarter performance was supported by record revenue in its Personal Systems segment, premium product mix and pricing actions, while Print results met expectations.

Speaking at the Goldman Sachs Communacopia + Technology Conference, Parkhill said the company raised its annual guidance even excluding the benefit of tariff refunds.

Parkhill said HP continued to execute its four-pillar plan for managing higher commodity costs, which includes securing supply, shaping demand, reducing costs and implementing pricing actions.

The company also benefited from refunds of IEEPA tariffs during the third quarter and expects additional refunds in the fourth quarter.

HP is focusing its Personal Systems strategy on premium commercial PCs, AI PCs, workstations, peripherals and service offerings, including its Workforce Experience Platform, or WXP.

Parkhill said the strategy is intended to expand market share, drive revenue growth and improve the company’s sales mix and margins.

The company is seeing growth across regions and regained market leadership in the Americas and North America during the latest quarter, Parkhill said.

While early demand for AI PCs was driven in part by customers seeking to future-proof their technology fleets, Parkhill said enterprise customers are increasingly seeking solutions that allow artificial intelligence workloads to run locally as well as in the cloud.

“Tokenomics is one compelling reason” for the shift, Parkhill said, citing rising token costs.

Customers also want faster, more secure and more privacy-focused AI capabilities, she said.

HP refers to the approach as hybrid AI, combining cloud-based and locally run AI.

Parkhill said WXP provides telemetry and operational data that can help chief information officers manage PCs, workstations, printers and collaboration devices.

The platform can identify potential issues before they affect employees and help customers configure devices with the appropriate amount of memory, an increasingly important consideration amid rising component costs.

Parkhill said increases in Personal Systems average selling prices have been driven by both pricing and product mix.

Lower-end PC demand has declined, while demand has shifted toward premium AI PCs, workstations and related peripherals, she said.

HP expects Personal Systems margins to be lower in the fiscal fourth quarter than in the third quarter, before improving sequentially and returning to its long-term 5% to 7% range at some point in fiscal 2027.

Parkhill said some margin-improvement actions require time, including repricing long-term en...