The payoff from AI will take time

Article Excerpt

On November 1, 2015, the old Hewlett-Packard Co. split into two firms—HP Inc. and Hewlett-Packard Enterprise. For every share they held in the old HP, shareholders received one share in each of the new companies. HP is now up over 120% since the split, while HP Enterprise has gained 40%. We still like both, particularly as they focus on artificial intelligence (AI) applications, but rising inflation and interest rates are hurting demand for their current products. HP INC. $31 is a hold. The company (New York symbol HPQ; Manufacturing sector; Shares outstanding: 986.0 million; Market cap: $30.6 billion; Dividend yield: 3.6%; Takeover Target Rating: Medium; www.hp.com) reported that its revenue in its fiscal 2024 first quarter, ended January 31, 2024, fell 4.4%, to $13.19 billion from $13.80 billion a year earlier. Personal computer sales (67% of the total) fell 4.1%, while sales of printers, ink and related products (33%) declined 5.1%. Those drops are mainly because higher interest rates and inflation are prompting businesses to cut…