HP CEO Enrique Lores on AI PC Demand, Tariffs, and Printer Market Trends

Strong Demand for PCs and AI PCs

• 💡 The PC market is performing as expected, with strong demand driven by Windows refreshes.
• 🚀 AI PCs are a significant growth area, already making up over 25% of HP's product mix this quarter, exceeding initial objectives.
• 🧠 AI PCs offer new capabilities that are expected to sustain demand for the foreseeable future.

Mitigating Tariff Impacts

• 🛠️ HP is actively mitigating the effects of trade environment changes through supply chain diversification and cost-saving measures.
• 📈 While some price increases are being implemented, HP anticipates being able to compensate for overall cost increases from the new trade environment.
• 📊 Tariffs have had a non-material impact on demand, estimated to be less than 1% and decreasing.

PC Replacement Cycle and Market Drivers

• 🔄 A key driver for PC demand is the replacement window, as PCs purchased during COVID-19 are now reaching their typical four-to-five-year lifespan.
• 💻 Other demand drivers include the transition to Windows 11 and the emergence of the AI PC category.

Printer Market Dynamics

• 🖨️ The printer market presents a mixed environment, with a slowdown in consumer demand.
• 🏢 Office-side printer demand is impacted as companies prioritize investments in areas like AI.
• 📈 Industrial printer demand is performing as expected or slightly stronger.