Why is HP stock falling due to artificial intelligence?

HP stock is falling because analysts believe the AI boom creates a 'memory squeeze,' diverting resources and negatively impacting its core computing and printing businesses.

What did Wedbush Securities say about HP's AI prospects?

Wedbush Securities identified HP as a potential 'AI loser,' citing that the AI infrastructure boom could hurt its core business due to a 'memory squeeze.'

How has HP stock performed recently?

HP shares have dropped 3.2% recently and are down 22.8% year-to-date, trading significantly below their 52-week high.

Home / Business and Economy / HP Faces AI 'Memory Squeeze' Stock Drop

HP Faces AI 'Memory Squeeze' Stock Drop

9 Dec

•

Summary

HP shares dropped 3.2% after being named an AI 'loser'.
Wedbush cited a 'memory squeeze' impacting HP's core business.
The stock is down 22.8% year-to-date and 31.2% from its high.

Personal computing and printing company HP saw its shares fall 3.2% in recent trading. This downturn followed a report from Wedbush Securities that listed HP among several companies likely to be negatively impacted by the ongoing artificial intelligence trade. The firm's analysts highlighted a phenomenon termed a 'memory squeeze,' suggesting that the intense focus and resource allocation towards AI development could detract from HP's established product lines.

While HP is a hardware manufacturer, the report indicated that the AI infrastructure surge poses a threat to its fundamental business operations. This assessment led to a closing price of $25.08 per share, reflecting a 3.1% decrease from the previous day's close. Year-to-date, HP has experienced a notable decline of 22.8%, and its current share price is 31.2% lower than its 52-week peak of $36.45 recorded in December 2024.

The market's reaction to this news is considered meaningful, though not a fundamental shift in its view of the company. The stock's volatility, with eleven moves exceeding 5% in the past year, suggests that such drops are not entirely out of the ordinary. However, the current situation contrasts with a previous rally in HP stock 17 days prior, which was driven by indications of a potential interest rate cut in December.