Strength Seen in HP (HPQ): Can Its 15.3% Jump Turn into More Strength?

HP HPQ shares rallied 15.3% in the last trading session to close at $25.24. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8.7% gain over the past four weeks.

The optimism surrounding the stock can be attributed to strong momentum in HP’s Personal Systems business, driven by the Windows 11 refresh cycle and rising adoption of AI PCs. Further, HP is benefiting from share gains in premium categories, expanding AI-driven workplace solutions and growing demand for peripherals and workforce solutions offerings, all of which are supporting investor confidence in the company’s growth outlook.

This personal computer and printer maker is expected to post quarterly earnings of $0.72 per share in its upcoming report, which represents a year-over-year change of +1.4%. Revenues are expected to be $14.05 billion, up 6.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For HP, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HPQ going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

HP belongs to the Zacks Computer - Micro Computers industry. Another stock from the same industry, Dell Technologies DELL, closed the last trading session 16.8% higher at $295.19. Over the past month, DELL has returned 19.2%.

Dell Technologies' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $3. Compared to the company's year-ago EPS, this represents a change of +93.6%. Dell Technologies currently boasts a Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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