HP Inc. HPQ shares have appreciated 36.7% year to date (YTD), outperforming the Zacks Computer - Micro Computers industry and the Zacks Computer and Technology sector’s return of 32.4% and 22.6%, respectively.
HPQ YTD Performance Chart
Image Source: Zacks Investment Research
Despite the stock price rally, HPQ trades at a discount. From a valuation standpoint, HPQ trades at a forward price-to-sales ratio of 0.46, below the industry’s 8.58. The discounted valuation is further substantiated by the Zacks Value Score of A.
HPQ Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Given these factors, the question arises: Should investors buy, sell or hold HPQ Stock?
HPQ Gains From Product Innovation and AI Integration
HPQ is pursuing a strategy centered on product innovation, premiumization, AI-enabled computing, recurring printing revenues and operational efficiency to sustain profitability amid rising component costs and structural pressure on traditional printing. Product refreshes remain central to HPQ’s competitive positioning.
HPQ recently introduced the OmniBook Ultra 16 with NVIDIA RTX Spark and the OmniDesk Mini with built-in AI capabilities. It also expanded Precise Print to more than 150 countries and integrated HPQ Poly Lens into its Workforce Experience Platform. These initiatives can strengthen product differentiation, encourage software adoption and support premium pricing across computing and printing workflows.
HPQ is also benefiting from the gradual transition toward AI-capable PCs. AI PCs accounted for 46% of Personal Systems shipments in the third quarter, up from 44% in the preceding quarter. Management expects the mix to reach approximately 50% by fiscal year-end, 60% to 70% in fiscal 2027 and more than 70% in fiscal 2028.
In Printing, HPQ continues to prioritize profitable hardware placements, subscription relationships and higher-growth industrial applications. Big Tank unit shipments increased 42% in the third quarter, accompanied by a four-point market-share gain, while Industrial Printing recorded its 12th consecutive quarter of revenue growth. The company is expanding its tank portfolio and completing the rollout of AI-enabled office laser products.
HPQ Competes in AI PC Space With Premiumization
The AI PC business in which HPQ claims to lead the market is facing considerable competition from Dell Technologies DELL and Lenovo LNVGY. On the other hand, its print business remains pressured due to competition from Canon CAJPY.
Dell has numerous workstations that offer AI capabilities. These workstations are XPS 13, Inspiron 14 Plus, Inspiron 14, Latitude 7455 and Latitude 5455. Lenovo’s lineup of AI computers includes Lenovo ThinkPad X1 Carbon 10th Gen and later, Lenovo Yoga 9i and Lenovo ThinkBook Plus Gen 3. Like HPQ, Canon has also integrated AI in its imagePROGRAF series of professional photo printers, such as the imagePROGRAF PRO-1000, to improve image production and color management.
HPQ’s partnerships with over 150 software providers could broaden use cases and strengthen demand for higher-value configurations. Meanwhile, HPQ’s focus on premium and commercial products is supporting revenue growth despite weaker unit volumes. Personal Systems revenues increased 18.5% year over year, even as PC shipments declined 15.8%, with average selling prices rising 40.8% amid pricing, currency and product-mix effects.
The Zacks Consensus Estimate for HPQ’s fiscal 2026 revenues suggests year-over-year growth of 3.5%. Estimates have remained unchanged in the past 30 days.
Image Source: Zacks Investment Research
Conclusion: Buy HPQ Stock
HPQ benefits from product innovation, growing AI PC adoption, premiumization and resilient cash flow, while its discounted valuation and Zacks Value Score of A support its investment appeal. Given its growth opportunities, cost mitigation efforts and attractive valuation, HPQ appears to be a stock worth retaining. HPQ sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).