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In recent days, Morgan Stanley downgraded computer hardware makers including HP, highlighting concerns about the impact of surging NAND and DRAM memory chip prices driven by artificial intelligence demand, which may weigh on hardware OEM earnings.
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This signals that rapid increases in memory component costs could challenge profit margins for leading hardware companies like HP, Dell, and Hewlett Packard Enterprise as they manage shifting input costs.
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We’ll assess how rising memory chip prices and cost pressures highlighted by Morgan Stanley could influence HP’s outlook and investment narrative.
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To be a shareholder in HP today, you need to believe in the company’s ability to convert rising demand for AI-driven PCs and subscriptions into sustainable growth, while managing cost headwinds. Morgan Stanley’s recent downgrade over soaring memory prices brings renewed focus to cost pressures, which now present the biggest near-term risk to HP’s margins and temper some optimism about AI PC momentum as a short-term catalyst.
Among recent company moves, HP’s August launch of its All-In Plan, a new printer subscription service, stands out. This aligns with efforts to build predictable, higher-margin recurring revenue, which could help cushion earnings against volatile hardware costs and underscores why subscription growth is considered key for HP’s medium-term outlook.
However, even as recurring revenue gains traction, investors should watch closely for signs that memory price inflation could pressure future quarters…
Read the full narrative on HP (it’s free!)
HP’s narrative projects $56.8 billion revenue and $2.9 billion earnings by 2028. This requires 1.3% yearly revenue growth and a $0.3 billion earnings increase from $2.6 billion today.
Uncover how HP’s forecasts yield a $28.28 fair value, a 24% upside to its current price.
HPQ Community Fair Values as at Nov 2025
Five individual fair value estimates from the Simply Wall St Community range from US$28.27 to US$38.11 per share. While community members see substantial upside, the recent spike in memory chip prices injects fresh risk that could sway sentiment and future performance, so it’s worth considering several viewpoints when evaluating HP.
Explore 5 other fair value estimates on HP – why the stock might be worth as much as 67% more than the current price!
Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.
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A great starting point for your HP research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.
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Our free HP research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate HP’s overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include HPQ.
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