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Is HP (HPQ) Expensive On Its RTX Spark AI PC Launch?

Simply Wall St · 1d ago

HP (HPQ) just put its AI hardware ambitions front and center with the launch of the OmniBook Ultra 16, OmniBook X 14, and OmniDesk, all built around NVIDIA RTX Spark capabilities.

The RTX Spark announcement follows a sharp run in HP’s shares, with a 90 day share price return of 32.2% and a year to date gain of 47.6% from a last close of $32.64. The 1 year total shareholder return of 18.2% and 5 year total shareholder return of 41.6% indicate momentum that has recently accelerated, supported by raised 2026 earnings guidance, updated fourth quarter EPS estimates, and ongoing buybacks that keep equity returns firmly in focus for existing investors.

Spot emerging AI hardware momentum by comparing HP with a curated list of 55 AI infrastructure stocks.

HP’s sharp rerating now sits at the crossroads of real AI product rollout and a market mood that can swing fast. How much of this move does the current valuation actually ask you to believe in?

Most Popular Narrative: 39.4% Overvalued

HP closed at $32.64 compared with a widely followed fair value estimate of $23.41, which puts the recent AI optimism under a tougher spotlight.

Despite strong momentum in AI PCs and premium segments, HP's medium

to long-term growth is still heavily reliant on cyclical factors like the Windows 11 refresh; once this refresh cycle matures, there could be a demand slowdown, impacting revenue and earnings, especially if diversification into new growth areas (e.g., services, industrial graphics, gaming) does not adequately scale.

Read the complete narrative. Read the complete narrative.

The fair value story for HP leans on steady earnings, only modest margin gains, and a lower future earnings multiple than many US tech peers. It may be useful to examine which assumptions most significantly influence that valuation.

Result: Fair Value of $23.41 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

Still, HP faces two clear swing factors: ongoing print market pressure and tougher PC pricing that could challenge the upbeat AI driven valuation story.

Find out about the key risks to this HP narrative.

Another View On HP: Multiples Paint A Very Different Picture

Here is where HP starts to look very different. On a simple P/E lens, the stock trades at 12x, while the global tech group sits closer to 20.1x and direct peers average 48.6x. The fair ratio estimate of 26.3x points to a market that could eventually re-rate the shares rather than compress them. Which version of HP’s story do you trust more: the discounted cash flow view or the much cheaper earnings multiple?

See what the numbers say about this price, find out in our valuation breakdown. See what the numbers say about this price — find out in our valuation breakdown.

NYSE:HPQ P/E Ratio as at Sep 2026
NYSE:HPQ P/E Ratio as at Sep 2026

Next Steps

Mixed signals on HP’s story so far. If you feel the clock is ticking on this AI rerating, weigh the 4 key rewards and 2 important warning signs.

Looking for more investment ideas beyond HP?

If HP’s AI push has your attention, do not stop here. Broaden your watchlist now with focused stock ideas that match different risk and return profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.