Is HP (HPQ) Undervalued After Expanding Its AI Hardware And Security Offerings

HP (HPQ) just rolled out a wide slate of AI-centric products, including HP IQ software and NearSense connectivity, Z workstations, gaming rigs, and new security tools like TPM Guard and quantum-resistant printers.

See our latest analysis for HP.

Despite this flurry of AI-focused launches, HP’s recent performance in the market has been mixed, with a 7 day share price return of 6.40% and a 1 year total shareholder return decline of 26.80%. This suggests recent momentum is picking up after a weaker stretch.

If this AI push has you thinking about where else intelligent computing is gaining traction, it could be worth scanning a wider field of 65 profitable AI stocks that aren't just burning cash

With HP trading around its analyst price target and sitting on an estimated 55% intrinsic discount, the key question for you is simple: is this an underappreciated AI hardware and security story, or is the market already pricing in future growth?

Most Popular Narrative: 3% Undervalued

HP's most followed narrative puts fair value at about $20.00, slightly above the $19.44 last close, which supports a mild undervaluation story built on modest growth.

Expansion and momentum in recurring digital and managed service models (such as Device-as-a-Service and consumer print subscriptions) are increasing the share of predictable, higher-margin revenue streams, supporting future earnings and operational stability.

Persistent structural cost reduction initiatives, including manufacturing diversification outside China, AI-enabled automation, and a $2B annualized savings target, are set to drive sustainable improvements in net margins and bottom-line earnings resilience.

Read the complete narrative.

Want to see what keeps that valuation within reach? The narrative leans on steady top line assumptions, firmer margins, and a lower earnings multiple than many US tech peers.

Result: Fair Value of $19.99 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that story can be knocked off course if print demand keeps sliding and rising memory and storage costs squeeze Personal Systems margins harder than analysts currently assume.

Find out about the key risks to this HP narrative.

Next Steps

With mixed signals across AI growth, valuation and execution risk, this is a moment to move quickly and independently test the story against the numbers using 2 key rewards and 3 important warning signs.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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