HP Hit by Rising Memory Chip Costs – Q1 2026 Earnings

February 27, 2026 Rachel Kim – Technology Editor Technology

HP Inc. Reported first-quarter fiscal year 2026 revenue of $14.4 billion, a 6.9 percent increase, as demand for artificial intelligence (AI) personal computers partially offset rising costs for memory components, the company announced on Monday.

The growth in revenue was driven largely by the Personal Systems segment, which saw revenue climb 11 percent to $10.3 billion. Within that segment, AI PCs accounted for 35 percent of shipments during the quarter, an increase from 30 percent in the previous quarter, according to HP. Total units shipped across Personal Systems increased 12 percent, with both consumer and commercial units rising by 14 percent and 11 percent respectively.

Despite the revenue gains, HP executives cautioned that increasing costs for DRAM and NAND flash memory are creating a challenging operating environment. Karen Parkhill, HP’s Chief Financial Officer, indicated the company now anticipates full-year results will likely be at the lower conclude of its previously stated guidance range.

“We are pleased with our execution in Q1, driving better than expected revenue growth and non-GAAP EPS above consensus,” Parkhill said.

HP’s gains in the PC market come as the industry experiences a refresh cycle driven by Windows 11 adoption and the increasing capabilities of AI. The company expects to see broader deployment of AI PCs throughout fiscal 2026 as enterprises upgrade devices to support AI workloads. HP reported gaining market share in both the commercial and consumer premium PC categories, particularly in the EMEA region and through its Advanced Compute Solutions portfolio.

According to a recent report by Omdia, HP ranked second in the global PC market in the fourth quarter of 2025, shipping 15.4 million PCs and recording growth both sequentially and year-over-year. HP’s market share in Q4 2025 was 20.8 percent, up from 20.2 percent in Q4 2024. Lenovo currently leads the market with a 26.1 percent share, up from 24.9 percent in the same period last year.

The company recently launched the HP EliteBoard G1a, described as the first AI PC with intelligence embedded directly into the keyboard, designed to enhance collaboration and on-device AI processing.

Supplies net revenue decreased by 1 percent, or 2 percent in constant currency, even as total hardware units were down 6 percent, with similar declines in both consumer and commercial printing units.