HP Q4 Earnings

By Patrick Moorhead - December 5, 2023

The Six Five team discusses HP Q4 Earnings.

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Transcript:

Patrick Moorhead: HP. Listen, HP was a reflection of the PC market. They met tiny beat on EPS, a tiny miss on revenue, but the forecast was just not good. And listen, Lenovo is down in PC, Dell is down in PC, Apple was down the biggest as a percentage. It is a weak market right now and what I’m a little disappointed at is the sell-in for the holiday selling season, for the consumer selling season. We would have seen that reflected in everybody’s and it was a little better, but on the commercial side, it’s a little soft and I’m thinking that this AIPC thing better kick in pretty fast in the middle of the year with all the three horsemen and Microsoft to really move the needle here. Quite frankly, I don’t think we’ve even scratched the surface on remote working and how we can optimize it and make it better and we haven’t nailed connectivity. So a lot of things we could possibly do, but it is not kicking in just yet.

Daniel Newman: Yeah. I think you’re right. Look, the theme of the conversation that we had with CEO Enrique Lores that can be shared is really AIPC, AIPC, AIPC. Look, there’s some other things. It’s always going to be driven by certain demands, certain pockets of product customer mix. You’ve got commercial and consumer always in different stages. You’ve got areas like workstations and gaming that come and go at different stages, but right now, the next supercycle, the next boom of demand for chips, especially on the PC side is going to be AI. And so everybody’s kind wondering when and the when question’s really interesting. If you look at the silicon diversity of what’s going to come from Intel ’cause they’re first out, not necessarily the highest performant of what we’re seeing announced right now, but then you’ve got AMD and of course Qualcomm and ARM with some really powerful variants.

It seems like second half next year is when you’re going to really start to see this, but then the question is even then people, they’re going to ease in or are they going to go all in? And the ease into all in could be the difference of a ton of units. So HP challenged the same fate as its peers. Nobody had a great quarter in the PC space. It just hasn’t happened yet, but the bottom does seem to be closer than it’s been based on an overall set of consensus that I’m hearing from the executives I’m talking to across semiconductor and the OEM space.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.