Enrique Lores, CEO of HP Inc. (HPQ), says that new advances in artificial intelligence will bring about major changes in computing for consumers and businesses in the next 24 months.
“What we’re working on is putting AI capabilities into the PC,” Lores told analysts during an earnings call late Tuesday. “So consumers and professionals will be able to run AI applications at the edge and not have to run them on a PC,” Cloud said. “
“The advantage of this is that if a small company wants to use some of their private data in an AI application, they don’t have to upload it, they can do it locally. “I will,” he said.
Lores added that HP is working closely with chipmakers to integrate new AI designs into its computers.
Lores said the effort will be revealed soon.
“There’s going to be a big shift. Customers will start seeing some of these solutions become available in 2024, about 12 or 20 months from now. And that’s really putting the energy into this category. It’s going to be a huge opportunity to bring,” Lores explained.
The computing market is in dire need of large amounts of energy.
HP saw sales in its PC and print divisions under pressure in the most recent quarter as businesses and consumers continued to tightly manage their finances after the pandemic.
Net sales in the second quarter were $12.9 billion, down 21.7% year-over-year, slightly below the $13.03 billion forecast. Personal systems (PC) sales fell 29% year-over-year, about $200 million less than analyst estimates. Print sales were down 5% year-over-year.
HP’s various cost-cutting efforts over the past year have managed to maintain margins in both businesses.
HP shares fell about 5% in premarket trading on Wednesday as investors focused on falling PC sales amid a softening economy.
But what’s somewhat overlooked is the potential trough in the first half of 2023 for PC makers like HP.
With the rise of AI, consumers and businesses will need to update their pandemic-era computers to stay competitive.
According to new data from industry research firm Canalys, US PC shipments are expected to grow 6% year over year in the fourth quarter of 2023. Full-year shipments in 2024 are projected to be 13% higher than in 2023.
Wall Street sees this refresh cycle as an inevitable earnings tailwind for HP.
“We believe that management’s comments on the financial results announcement regarding the significant drop in inventory levels and the seasonal recovery in PC sales due to consumer demand are largely consistent with our own checks, and we expect seasonal upside to continue. We expect “the macro economy will not get any worse,” JPMorgan analyst Samik Chatterjee said in a research note.
Chatterjee added, “Further increasing our confidence in our volume forecast is the growing installed base of PC units and robust replacement cycles prioritizing high-end features in PCs.”
Brian Sotzi Executive editor at Yahoo Finance. Follow Sotzi on Twitter @BrianSozzi and further LinkedIn. Bank Crisis Tips? Email brian.sozzi@yahoofinance.com
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