HP Inc. (HPQ): Positioned for a Comeback as AI-Powered PCs Gain Momentum

HP Inc. (NYSE: HPQ) is emerging as a tech stock with great potential, thanks to its advancements in AI-powered PCs. In a world where artificial intelligence is reshaping industries, HP is aligning itself with the AI-driven future. The company is showing signs of recovery, with its third-quarter revenue growing for the first time in nine quarters. With its next-generation AI PCs gaining traction, particularly among knowledge workers and data scientists, HPQ is positioning itself to reap the benefits of the AI boom.

Big Tech’s AI Push Boosting the Market

Artificial intelligence has quickly become the standout performer in the tech sector in 2024. Large-cap tech companies are dominating the AI landscape due to their ability to invest heavily in AI development. The result? AI is pushing the overall tech sector to new heights. According to Alex Kantrowitz, Founder of Big Technology, AI trends are also expected to drive demand in other areas like energy, as companies building and training large language models seek more efficient energy sources.

The AI Revolution in Digital Advertising

AI is making waves in digital advertising too. AI-powered marketing clouds are helping businesses achieve significant returns on their investments. David Steinberg, CEO of Zeta Global, noted that the introduction of ChatGPT was a “renaissance moment” for AI, sparking widespread adoption across industries. Steinberg believes that companies in advertising and retail are now embracing enterprise-level AI to boost operational efficiency and drive profits.

HP’s Strategy: AI-Powered PCs and Workstations

HP’s third-quarter performance marked a turning point, with a 2% year-over-year revenue increase, ending nine consecutive quarters of declines. This growth is primarily driven by the company’s AI PCs, which are increasingly popular among professionals who rely on powerful computing. In July 2024, HP introduced a new premium AI-optimized PC model powered by the latest AMD processor, quickly recognized as one of the most powerful AI PCs available. Additionally, HP became the first tech company to integrate generative AI into its workstation solutions, enhancing productivity for users in demanding sectors.

With strong personal systems revenue expected for the fourth quarter and continued strength in the commercial segment, HP’s focus on AI appears to be paying off. While its printers division remains sluggish, investors are more excited about the long-term potential of AI PCs to drive profitability.

Hedge Fund Interest and Market Outlook

A total of 41 hedge funds were long on HP Inc. in the second quarter of 2024, holding a total stake value of $654.9 million. Greenlight Capital, in its second-quarter investor letter, highlighted HPQ as one of its top-performing stocks, noting that PC sales have finally turned positive. The company’s AI-enabled PCs are expected to be a significant growth driver in the coming quarters, positioning HP as a promising investment opportunity.