JPMorgan resets HPQ stock price target ahead of earnings

For years, HP Inc. (HPQ) has been a institution investors bought for the dividend, not the upside. A dilatory PC and printer concern that pays a generous quarterly check, has a single-digit net multiple, and astir nary story.

Then past Friday happened.

HPQ jumped sharply successful a azygous session, up 15%, according to IBTimes. The buyers were not reacting to thing HP said. They were reacting to a rival's earnings, 5 trading days earlier HP's ain report.

For the archetypal clip successful a agelong time, investors are betting HPQ mightiness beryllium thing different than a output trap.

HP Inc. reports fiscal second-quarter net connected May 27, 2026, successful what JPMorgan calls a cardinal AI PC test.Bloomberg / Getty Images

Lenovo net bushed conscionable changed however Wall Street prices HP

Lenovo, the world's largest PC maker, blew done its quarterly numbers, Reuters reported. Revenue grew astatine the fastest gait successful 5 years.

But that was not the lone happening that woke the market.

Nearly 4 retired of each 10 dollars Lenovo brought successful past 4th came from AI-related products, the institution disclosed, per Benzinga. For a institution astir investors inactive deliberation of arsenic a PC maker, that is simply a tectonic shift.

More AI hardware coverage:

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Here is the read-through that sent HPQ flying:

Lenovo and HP beryllium astatine the apical of the planetary PC market. They merchantability to the aforesaid endeavor buyers, vessel done the aforesaid channels, and thrust the aforesaid refresh cycles. When 1 of them prints a 4th this beardown connected AI-related earnings, the marketplace assumes the different is sitting connected the aforesaid demand.

That presumption is what investors paid for connected Friday.

JPMorgan's caller people shows measured belief, not euphoria

A week earlier the Lenovo print, JPMorgan expert Samik Chatterjee softly raised his terms people connected HP and kept his Neutral standing successful place, a reversal of his anterior presumption connected the stock.

Last October, Chatterjee downgraded HPQ to Neutral, per Yahoo Finance, informing that the Windows 10 replacement roar was astir implicit and HP would look brutal comparisons successful 2026.

The May people hike is him walking that pessimism backmost without calling it wrong, for now. The rhythm is moving hotter than helium expected, but helium is not acceptable to accidental it volition last.

Other desks stay split. Morgan Stanley nudged its people higher successful the aforesaid week. Bank of America stayed firmly antagonistic and is informing that HP could chopped its full-year guidance erstwhile it reports connected Wednesday.

That is the standoff investors are walking into connected May 27.

Why the May 27 net people matters much than the rally

HP reports fiscal second-quarter results aft the adjacent connected Wednesday, May 27, 2026.

The Street is broadly expecting a humble beat, according to The Globe and Mail, but the fig that truly matters is the AI PC mix.

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Last quarter, HP said astir a 3rd of each PC it shipped was an AI-capable machine with a dedicated neural processing chip, up sharply from the anterior period, per FinancialContent.

If that ratio jumped again, particularly connected the commercialized side, HP is nary longer a bequest hardware story. It is an AI PC re-rating candidate.

If it stalled, Friday's rally was a caput fake.

The cheap-stock setup that makes Friday's determination imaginable

HPQ trades astatine a guardant net aggregate successful the azygous digits and pays a dividend output adjacent to 5%, per GuruFocus.

By its ain ten-year standards, that valuation is steeply discounted, and that is the portion astir investors miss.

When a banal is priced for imperishable stagnation, and the rhythm softly turns underneath it, the determination higher does not request a blowout quarter. It needs a crushed to uncertainty the carnivore case. Lenovo conscionable delivered one. HP's net could present another.

That is wherefore a sleepy printer-and-PC sanction moved similar a maturation banal past week.

What inactive has to spell close for the bull lawsuit

Friday's rally is borrowed conviction. To support it, HP has to corroborate what Lenovo implied.

Five things person to land:

• AI PCs marque up a bigger stock of full shipments than they did past quarter.

• Commercial request stays strong done the agelong process of the Windows 11 transition, which IDC expects to tally good into adjacent year.

• Memory outgo ostentation is offset by pricing, not absorbed into margins.

• HP stops losing U.S. marketplace share aft a crisp gaffe earlier this year, per BofA manufacture information reported connected Yahoo Finance.

• Management holds the full-year outlook alternatively of trimming it.

Miss two, and the rally fades. Hit four, and JPMorgan's people volition look excessively debased for what HP conscionable proved.

HPQ vs the S&P 500: a relative-value story, not a momentum 1

Step backmost from Friday's headline, and the spread betwixt HPQ and the broader marketplace tells a antithetic story.

While the S&P 500 has been compounding gains, HPQ has been softly losing ground.

Two stocks, 2 other years:

• The S&P 500 has climbed astir 27% implicit the past 12 months, riding the AI infrastructure question done each large mega-cap name, per FinanceCharts data

• HPQ has fallen astir 24% implicit the aforesaid stretch, treated arsenic a casualty of the rhythm alternatively than a subordinate successful it

• The S&P 500 has spent 2026 grinding higher, hitting grounds territory successful precocious May

• HPQ is inactive down astir 5% year-to-date, adjacent aft Friday's double-digit surge erased months of losses

• The S&P 500's dividend output sits adjacent 1.05%, per Multpl data, portion HPQ pays adjacent to 5%, a spread that signals however overmuch pessimism is already priced in

That past enactment is the full setup.

A banal yielding astir 4 times the scale is 1 that the marketplace has stopped expecting to grow. It is besides the benignant of banal that re-rates violently erstwhile maturation shows up.

Friday's determination was the archetypal hint of that re-rating. The May 27 net people decides whether it sticks.

JPMorgan's caller people is not a verdict connected HPQ. It is simply a placeholder. What Samik Chatterjee says next, and whether his Neutral standing turns into thing warmer, depends wholly connected what HP shows connected Wednesday afternoon.

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This communicative was primitively published by TheStreet connected May 25, 2026, wherever it archetypal appeared successful the Investing section. Add TheStreet arsenic a Preferred Source by clicking here.