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HP reports rising memory costs impacting fiscal outlook
Tuesday, February 24, 2026 at 09:44 PM
The CFO of HP Inc. reported that rising memory costs are impacting financial performance, leading the company to project annual results toward the lower end of their guidance range.
Context
HP Inc. reported fiscal first-quarter 2026 results on February 24, 2026, warning that surging memory costs are squeezing hardware margins. While the company maintained its full-year non-GAAP earnings guidance of $2.90 to $3.20 per share, CFO Karen Parkhill indicated that results will likely land at the low end of that range. This pressure stems from a global supply crunch in DRAM and NAND chips, driven by intense demand for AI infrastructure that has redirected component supplies away from traditional PCs.
The memory headwind represents an estimated $0.30 EPS impact for the year, with these components now accounting for 15% to 18% of a typical PC's cost. To offset these inputs, HP Inc. is raising prices and qualifying new suppliers. Despite the cost pressure, Personal Systems revenue rose 11% to $10.25 billion this quarter, fueled by the rapid growth of AI PCs, which now account for over 30% of shipments.
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