Global technology giant HP Inc. released its first-quarter financial report on Thursday, February 27th, outperforming market expectations with revenue boosted by strong growth in the Personal Systems division and increased demand for artificial intelligence (AI) support equipment.
The company reported revenue of $13.5 billion in the first quarter, surpassing market expectations of $13.36 billion. The Personal Systems division, including desktops, laptops, and displays, showed impressive performance with a 5% revenue growth to $9.2 billion. The commercial computer business saw a 10% increase, indicating a rising demand for high-performance computers in the corporate sector.
Market analysts anticipate a surge in upgrades as Microsoft ends support for Windows 10 in October this year, potentially driving further market growth with millions of computers requiring updates. Moreover, the demand for personal computers equipped with AI capabilities is on the rise, prompting major tech companies to accelerate the release of devices featuring high-performance AI chips.
Despite the strong revenue performance, HP also announced an expansion of its restructuring plan, with an additional 1,000 to 2,000 staff layoffs expected. This measure is projected to save $300 million in costs during the 2025 fiscal year.
Additionally, HP’s forecast in the financial report indicates an adjusted earnings per share of $0.75 to $0.85 for the second quarter of the 2025 fiscal year, lower than the market expectation of $0.86. As a result, HP’s stock price dropped over 3% in after-hours trading.
Concerns about tech companies’ profit margins have been heightened as U.S. President Donald Trump plans to impose an additional 10% tariff on Chinese imports starting from March 4th.
HP CEO Enrique Lores stated in an interview that the company has been actively adjusting its supply chain to mitigate the impact of trade policy changes. By the end of October, over 90% of HP products sold in the North American market will be manufactured outside of China, reducing vulnerability to trade policy shifts.
Lores expressed optimism about HP’s future direction in AI PC development, saying, “We are at a crucial turning point in the PC market. AI technology not only enhances device performance but also transforms user experience. HP will continue to drive product innovation to maintain a leading position in this market.”
According to data from market research firm Canalys, the global PC market saw five consecutive quarters of growth in the fourth quarter of 2024, with a 5% annual increase in total shipments to 67.9 million units.
With the upgrade and continuous development of AI PCs, hybrid office solutions, and enterprise IT infrastructure, HP anticipates new growth opportunities in the coming years. The company’s future performance remains of interest amidst market recovery and advancements in AI technology.