Which is why he believes they will go down as Elon's greatest-ever invention… his biggest ever disruption.
On July 22, Elon is expected to share this new venture with the world.
Once he does, this is going to be everywhere — from Fox Business to your family's group chat.
Adams believes investors who get positioned before that date could walk away wealthier than they ever thought possible. Everyone else will be reading about it after the stocks have already run.
He'll show you exactly what Elon is building, what's inside these strange white crates… and I'll give you the name and ticker of one of his top picks to play it — completely free.
Adam O'Dell
Chief Investment Strategist, Money & Markets
Today’s editorial pick for you
AI PC Boom Lifts HP, But Questions Linger
Posted On Jun 03, 2026 by Chris Markoch
HP Inc. (NYSE: HPQ) delivered a quarter that turned heads…and then some. The stock surged nearly 7% on May 27 after the company reported Q2 FY2026 results that handily topped expectations on the earnings-per-share line, pushing HPQ above its consensus analyst price target in a single session.
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The catalyst was a combination of strong revenue growth and an accelerating AI PC story that has investors reconsidering what they thought they knew about this slow-and-steady hardware name. But for every reason to get excited about HPQ, there’s a counterargument that keeps it firmly in value territory. It’s the kind of stock that’s easy to respect and hard to love.
The numbers were real. Net revenue came in at $14.4 billion, up 9% year over year. Non-GAAP diluted earnings per share of $0.86 demolished the company’s own guidance range of $0.70 to $0.76. The Personal Systems segment — HP’s PC business — grew 13% year over year to $10.2 billion, powered by commercial demand and a ninth consecutive quarter of revenue growth.
AI PCs now represent 44% of total compute shipments, and the company’s new EliteBook 6 G2q and gaming-focused HyperX Omen Max 45L were showcased at HP Imagine 2026 as the face of that momentum. The question isn’t whether the quarter was good. It was. The question is what it means from here.
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The post-earnings pop pushed HPQ above what Wall Street analysts had collectively modeled as fair value — an awkward place to be for a stock most investors treat as a bond proxy with a technology label. In the days following the report, several analysts raised their price targets: Citi went to $26, TD Cowen to $26, and UBS to $26 from $20. Bank of America moved more cautiously, raising its target to just $18. The range tells the story of a stock where conviction is scattered.
The bull thesis centers on the AI PC upgrade cycle. For several years, enterprise PC refresh cycles were suppressed. The argument now is that AI-capable hardware — machines with NPUs capable of 85 TOPS or more — will trigger a new wave of corporate purchasing that rivals or exceeds past Windows transition cycles. HP’s double-digit growth in AI PCs, Advanced Compute Solutions, and Workforce Solutions suggests it’s not just a talking point. The company’s Workforce Experience Platform now manages over 5.2 million devices across 180 countries, which is a recurring revenue story worth watching.
Still, institutional ownership data shows more buyers than sellers, with little conviction on either side. That’s not a screaming endorsement. And for all the AI enthusiasm, the Printing segment — which carries far better margins at 18.3% operating profit versus 5.2% for Personal Systems — was essentially flat year over year in revenue and down slightly in constant currency. For a company whose profit engine still depends heavily on ink and toner, that matters.
The Debt Situation Deserves a Closer Look
Here’s the part of the HP story that doesn’t make the earnings headline but probably should. HP carries approximately $9.7 billion in gross debt against total stockholders’ equity that is currently negative, sitting at roughly negative $766 million as of the most recent quarter. That produces a debt-to-equity ratio that is mathematically meaningless in the traditional sense, because there is no equity cushion to speak of.
To be clear, this is not a crisis. HP’s interest coverage ratio is approximately 10.8x, indicating that operating earnings cover interest payments by a wide margin. The company generated $2.9 billion in free cash flow in fiscal 2025 and is guiding for $2.8 to $3.0 billion in FY2026. HP maintains a capital allocation framework that targets returning 100% of free cash flow to shareholders over time, provided gross leverage remains below 2x, and the company has earmarked cash to pay down a debt maturity coming this summer.
The reason the debt matters for dividend investors specifically is that HP’s capital return program — dividends and buybacks — competes directly with debt service for the same pool of free cash flow. Rising memory costs are expected to hit thirty cents per share in the back half of fiscal 2026, which could pressure margins and, by extension, the free cash flow that funds both.
The dividend payout ratio sits at a manageable 43–44% of earnings, and HP has increased its dividend for 11 consecutive years. That streak is not in immediate danger. But negative book equity combined with a leveraged balance sheet means there is less financial flexibility than the dividend history implies. If business conditions deteriorate sharply — a demand slowdown, a tariff shock to input costs, or a credit market disruption — the company would face harder choices about its capital allocation priorities.
Where the Bulls Could Be Right
The bear case on HPQ has been largely unchanged for years: it’s a mature hardware company in slowly declining markets, propped up by a razor-and-blade model in printing that itself faces secular headwinds. That narrative may be incomplete heading into FY2026.
The AI PC cycle is genuinely different from past hardware refreshes because it’s being driven by software requirements, not just OS compatibility. Enterprise IT departments are being pushed by productivity software vendors to upgrade endpoints to run AI workloads locally — and HP is one of only a few companies with the scale and commercial relationships to capture that demand at volume. The EliteBoard G1a, billed as the world’s first AI keyboard PC, and the growing ecosystem of over 150 software companies supporting HP’s AI platform suggest the company is building something more than a product line — it’s building a platform argument.
Consumer subscriptions also grew double digits across Instant Ink, Instant Paper, and the All-In-Plan, adding recurring revenue that partially insulates the printing business from unit decline. And HP’s FY26 non-GAAP EPS guidance of $2.90 to $3.10 puts the stock at a forward P/E around 9x at current prices — which is not expensive for a company growing earnings at a double-digit rate.
Technical Picture: Momentum Has Arrived, Belatedly
The chart tells a recovery story that’s still in early innings. HPQ spent most of the past year grinding lower from the high $20s to a trough near $18 in early spring, well below its 50-day moving average. The Q2 earnings catalyst changed that abruptly. The stock exploded higher on volume of 29.2 million shares — well above average — reclaiming levels not seen since September 2025. The MACD has crossed sharply bullish, with the signal line and histogram both confirming momentum.
The 50-day SMA at $20.92 is now well below the current price of $27.29, which means the near-term trend has shifted. Whether that momentum sustains depends on whether the AI PC narrative holds through the next quarterly print.
Verdict: Worth Watching, Hard to Chase
HPQ is not a broken company. The Q2 FY2026 report made that clear. Revenue is growing, earnings are beating, the AI PC thesis has real data behind it, and the dividend — yielding roughly 4.4% at current prices — has been raised for 11 consecutive years. Against a forward earnings multiple of roughly 9x, the valuation case is credible.
But the stock has already moved. It traded above its consensus price target on earnings day, and analysts are still catching up, with raised targets clustering in the $25–$26 range — barely above where the stock sits now. The debt load isn’t an emergency, but it does constrain the company’s options in a downturn. And the printing segment, for all its margin contribution, remains a slow-bleed business.
If the AI PC cycle is real and durable, HPQ could genuinely re-rate higher. If it fades or gets priced into expectations too quickly, the stock reverts to what it has been for a decade: a yield play in a value trap. For now, it’s somewhere in between — and that’s exactly what makes it so hard to love unconditionally.
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