HP Inc. says memory has suddenly become one of the most expensive line items inside a PC—an uncomfortable shift for a company that ships millions of them.
On HP’s fiscal Q1 2026 earnings call, interim CEO Bruce Broussard said memory now represents 35% of a PC’s bill of materials, up from about 15%–18% in the prior quarter. HP expects that pressure to continue building through the year.
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Check Price on AmazonTo keep products flowing while component costs jump, Broussard said HP has locked in long-term supply agreements, qualified new suppliers, and built “strategic inventory positions” for key platforms. He also said HP has cut the time required to qualify new materials in half, allowing the company to change configurations faster when parts get tight or expensive.
HP says it’s also expanding lower-cost sourcing across its “commodity basket,” tightening logistics via end-to-end planning, and using internal AI initiatives to make those processes more responsive. On the commercial side, the company said it’s shaping demand to better match supply—and taking targeted pricing actions with channel and direct customers to offset remaining cost impacts.
Broussard also pointed to the Supreme Court’s decision striking down key Trump-era tariffs and said HP doesn’t expect to be negatively impacted by subsequent developments. After the ruling, the administration moved to replace the struck-down tariffs with a temporary 10% tariff under different authority—adding another layer of uncertainty for import-heavy hardware supply chains.
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Check Price on AmazonThe numbers show HP’s PC business is still finding demand. Personal Systems revenue came in at $10.3 billion, up 11% year over year, with consumer and commercial units both rising. HP says AI PCs now make up about 35% of the PCs it sells, and executives credited Windows 11 adoption and increasing local-AI software support as tailwinds.
Printing, meanwhile, slipped 2% to $4.2 billion in revenue—but kept an 18.3% operating margin, far above the margin in Personal Systems. Overall, HP reported $14.4 billion in total revenue (up nearly 7%) and non-GAAP EPS of $0.81, hitting the top end of its guidance range.
Still, CFO Karen Parkhill warned full-year results are likely to land closer to the low end of guidance as HP tries to protect margins while memory costs climb. Investors didn’t love the setup: HP shares fell roughly 6% in after-hours trading following the report.