Why Is HPQ Stock Down In Premarket?

• HP stock drops 5% in Wednesday’s premarket trading.
• The company said higher memory chip prices are weighing on margins.
• Stocktwits sentiment for HPQ flipped to ‘extremely bullish’ from ‘bearish.’

HP, Inc. shares declined by over 5% in early premarket trading on Wednesday and are on track to test a fresh low, after the computer and printer maker dialed down its full-year earnings forecast.

"With just one quarter behind us in a dynamic environment marked by increasing memory costs, we are holding our outlook for the year, yet currently anticipate results to be closer to the low end of our range," HP finance chief Karen Parkhill said in a statement.

Memory Chip Shortage, Tariffs Weigh

Memory chip shortages and higher prices have squeezed industries from electronics makers to automakers, forcing many to either absorb margin hits or pass costs on through price increases.

HP said it expects adjusted profit for fiscal 2026 ending October to be at the low end of its previously issued forecast of $2.90 to $3.20 per share. It anticipates PC unit shipments to decline in the double digits.

The company said it has taken measures to counter the impact of the changing market dynamics, including tariffs, such as reworking parts of its supply chain and increasing prices.

HPQ Stock Under Pressure

HPQ shares have declined 18.3% year to date and are trading near an over five-year low. Stocktwits sentiment for HPW, however, flipped to ‘extremely bullish’ from ‘bearish.’ 

Q1 Results

The forecast commentary took the sheen off stronger-than-expected first-quarter results. Sales rose 6.9% to $14.44 billion, beating estimates of $13.94 billion from LSEG/Reuters. Adjusted profit came in at $0.81 per share, also exceeding expectations of $0.76.

HP said customers seeking new computers alongside the ongoing Windows 11 upgrade cycle, as well as the growing adoption of AI-powered computers, boosted sales. 

AI PCs constituted more than 35% of the company's total PC shipments in the first quarter, up from 30% in the previous quarter.

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