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HP Inc (NYSE:HPQ) faces a tougher outlook as the strong sales boost from the Windows 10 replacement cycle comes to an end, creating difficult growth comparisons for the year ahead.
• HPQ stock is showing notable weakness. Get the market research here.
A combination of slowing PC demand, a challenging economy and rising memory costs is creating significant headwinds for HP’s future revenue and profit growth.
JPMorgan analyst Samik Chatterjee issued a downgrade for HP stock from Overweight to Neutral with a price target of $30.
Chatterjee said the company is moving past a favorable business cycle into a more difficult period. The analyst noted the strong tailwinds that benefited HP are now creating future challenges.
Also Read: HP Prints Solid Q3, Analysts Expect It To Ride AI PCs Into 2026
Chatterjee identified three main headwinds:
• First, the Windows 10 replacement cycle, which drove strong commercial PC sales in 2025, is now at its tail end. This creates tough year-over-year comparisons for growth in 2026.
• Second, he sees a challenging macroeconomic environment that offers few reasons for consumers to begin a new PC replacement cycle.
• Finally, rising memory costs will likely squeeze HP’s profit margins, as the current weak demand makes it difficult for the company to pass those higher costs on to customers.
While Chatterjee is raising his near-term revenue and earnings forecasts for HP due to the stronger-than-expected upgrade cycle in 2025, he views this as a double-edged sword.
The analyst noted the strong performance in 2025 sets up a more difficult environment for 2026 and 2027, when sales volumes will face tougher comparisons. He also noted AI-powered PCs have not yet gained enough traction with consumers to act as a significant new growth driver.
Given that HP’s stock is already trading in line with its historical valuation, Chatterjee sees limited upside for the shares. The analyst forecasted that HP will deliver only low-single-digit revenue growth and modest earnings growth in fiscal year 2026. He moved to the sidelines pending a clearer path to an improving economy or a more favorable cost environment.
Chatterjee projected fourth-quarter revenue of $15.14 billion and EPS of 93 cents.
HPQ Price Action: HPQ stock is down 1.10% at $27.85 at publication on Wednesday.
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Posted In: HPQ
