HP Inc. has revealed that memory now accounts for 35 percent of the cost of materials it needs to build a PC, up from between 15 and 18 percent last quarter. And the company expects RAM’s contribution will rise through the year.
Speaking on the company’s Q1 2026 earnings call, interim CEO Bruce Broussard said the company has secured long-term supply agreements for the year and also “qualified new suppliers [and] built in strategic inventory positions for key platforms and cut the time to qualify new material in half to accelerate our product configuration changes.”
That sounds a lot like HP Inc is signing up new suppliers at a brisk pace. Broussard said the company has also “expanded lower-cost sourcing across our commodity basket, lowering logistics costs with agile end-to-end planning processes.” The company is using its internal AI initiatives to power those new processes.
The company is also “configuring our products and shaping demand to align the supply we have with our customer needs” and “taking targeted pricing actions to offset the remaining cost impact in close partnership with both our channel and direct customers.”
Broussard mentioned the US Supreme Court’s recent decision striking down the Trump administration’s tariffs, and said “Right now, we do not expect to be negatively impacted by the subsequent developments following the court decision.” The most obvious subsequent development was the administration’s decision to increase tariffs from 10 percent to 15 percent. Another is the possibility that importers who paid tariffs may seek refunds from Washington, or face demands from consumers for refunds.
The company reported $10.3 billion revenue from its personal systems division, up 11 percent year over year. Consumers bought 14 percent more PCs than in the previous year, sending revenue up 16 percent. Business buyers bought 11 percent more boxen, meaning revenue rose nine points.
Ketan Patel, HP Inc’s president for personal systems, said Windows 11 adoption propelled PC sales, and that demand for AI PCs is helping, too, with 35 percent of the PCs HP sells now AI PCs.
“The local models on AI PCs started to deliver results, with more and more ISVs developing applications, which are using [AI] locally and more effectively than ever before,” he said, adding that HP is working with over 100 software developers to encourage creation of more apps ready to take advantage of AI PCs.
Revenue from printing products dipped two percent, to $4.2 billion. However the printer biz achieved 18.3 percent operating margin, well beyond the five percent achieved by personal systems.
Total revenue for the quarter was $14.4 billion, up almost seven percent year-on-year. Non-GAAP earnings per share came in at $0.81, the top of the company’s past guidance range.
But CFO Karen Parkhill warned she expects full-year outcomes will be “closer to the lower end of our guidance range” as the company struggles to cope with the tumultuous business environment and keep margins high as memory prices rise.
The company’s shares opened the day at $18.33. In after-hours trading, they dipped to $17.15, a six percent retreat that suggests investors were not excited by HP Inc’s prospects. ®
Source: The register