$HP Inc (HPQ.US)$It is believed that artificial intelligence (AI) personal computers will be a key factor driving demand growth in the personal computer market. The company plans to integrate AI technology into its product line to adapt to hybrid work environments and significantly improve employee efficiency. In addition, HP CEO Enrique Lores predicts that the promotion of AI personal computers will gain faster momentum in 2025 and 2026.

HP CEO Lores spoke at the Goldman Sachs Communacopia+ Technology Conference, discussing the company's recent earnings, the outlook for AI, and future growth drivers. Regarding HP's recently announced third-quarter earnings, Lores pointed out that although non-GAAP earnings per share fell short of expectations, the company has resumed growth for the first time in several quarters.

Lores predicts that the growth of the personal computer market in 2025 will surpass 2024, based on three factors. First, a large number of PC devices purchased during the COVID-19 pandemic have now become outdated and need to be replaced. Second, with Microsoft's announcement to end support for older versions of Windows, the update to Windows 11 will bring new opportunities. Third, the introduction of AI personal computers will accelerate in 2025 and 2026, which HP expects to become an accelerator driving market demand.

"We expect the personal computer market to see slight growth in 2024 and further growth in 2025," added Lores. From a regional perspective, the Indian market has achieved significant growth, and HP sees India as a key market for future growth.

In addition, in HP's business, the commercial segment accounts for approximately 75% and the consumer segment accounts for approximately 25%. Lores emphasized that the commercial PC business is more important in terms of sales volume and pricing because of its higher prices and profit margins. In contrast, although consumer spending on hardware is generally weak, Lores believes that upgrades are inevitable over time. Additionally, the application of AI technology will also have an impact on the consumer market and drive demand growth.

When it comes to the outlook for AI personal computers, Lores predicts that in three years, AI personal computers will account for approximately 50% of the market's shipment volume and may drive up the average selling price (ASP) of the entire PC category by 5% to 10%. He predicts that the impact in 2024 will be relatively small, while the impact in 2025 and 2026 will be more significant.

Currently, HP has begun collaborating with Microsoft to launch a new generation of AI PCs and has already started shipping.$Qualcomm (QCOM.US)$And.$Advanced Micro Devices (AMD.US)$Lorees also mentioned HP's investment in peripherals such as headphones, speakers, and cameras in the business and gaming fields, where consumers are willing to invest a substantial amount of money.

Lorees commented: "These are the areas we were less involved in before, but now we have the corresponding product portfolio, which will help drive our growth." He added that gamers spend three times as much on peripherals as they do on PCs, and HP has a strong gaming peripheral product portfolio through the HyperX brand, which presents the company with an opportunity for profit growth.

Editor/ping