The Key Dining Establishments
- A decrease in consumer demand impacted HP’s earnings, but the company foresees AI servers as a significant driver of future growth.
- HP’s PC and printer segments experienced a drop in quarterly profits, with total revenue declining by 6.5% compared to the previous year.
- CEO Enrique Lores mentioned that AI servers could potentially boost profits starting from the upcoming month.
HPQ’s recent financial performance was adversely affected by the waning demand for PCs following the surge during the pandemic. However, the company is optimistic about the potential for artificial intelligence (AI) systems to drive substantial growth in the coming year.
In the fourth quarter of HP’s fiscal year 2023, revenue decreased by 6.5% year-over-year to \(13.85 billion. The printing division reported a 3% decline in sales, amounting to \)4.4 billion, while the Personal Systems unit saw an 8% decrease in sales, totaling \(9.4 billion. Earnings per share (EPS) rose to \)0.97 from a loss of $0.02 in the previous year. Both EPS and total profit aligned with expectations.
During a televised interview, CEO Enrique Lores acknowledged the challenging market conditions in 2023 but expressed confidence that AI-driven computing could substantially accelerate growth and potentially double PC sales.
While an immediate shift to AI-powered PCs is improbable, Lores indicated to analysts that there is anticipated gradual adoption, with incremental gains in 2024, further market penetration in 2025, and potentially widespread adoption by 2026. HP is set to unveil its first AI-powered PCs in the following quarter of the upcoming year.
Following these developments, HPQ shares initially dipped but later rebounded, showing a more than 2% increase in intraday trading on Wednesday. Year-to-date, the stock has risen by over 6%.
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