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HP (HPQ) shares experienced a dramatic surge on April 13 after SemiAccurate claimed in its latest report that Nvidia (NVDA) had been negotiating for over a year to acquire a major PC company.
Adding to momentum on Monday was algorithmic buying as the buyout rumors helped HPQ break decisively above its key moving averages (20-day and 50-day).
Despite the surge, however, HP stock remains a laggard, currently down about 12% versus the start of 2026.
A Simple Reason to Avoid Investing in HP Stock
Investors are cautioned against chasing the momentum in HPQ stock for one simple reason: Nvidia has since denied all claims of it being in discussions to acquire a PC maker.
In fact, as the chipmaker issued its definitive rebuttal, HP was already seen rolling back its intraday gains in extended hours.
And now that a buyout has been ruled out as a credible catalyst, the macro environment will likely be in focus again — and it clearly doesn’t favor owning HPQ in 2026.
Rising memory prices are squeezing the firm’s margins, while the global PC market remains mature with limited growth prospects outside of periodic refresh cycles.
Macro Environment Doesn’t Warrant Owning HPQ Shares
From a fundamental standpoint, HP shares remain modestly valued (less than 7x forward earnings), but geopolitical tensions, including the Iran war, suggest multiple expansion is unlikely, at least in the near term.
The conflict-driven disruption of the Strait of Hormuz and the subsequent rise in energy costs have exacerbated inflationary pressures, with the consumer price index (CPI) climbing to 3.3% in March.
This means that the Federal Reserve may now be forced to maintain higher interest rates, which increases the discount rate applied to future cash flows.
Simply put, investors will likely avoid paying a premium for low-growth hardware names like HP Inc in 2026.
What’s the Consensus Rating on HP?
Wall Street analysts aren’t particularly bullish on HPQ shares either.
According to Barchart, the consensus rating on HP sits at a “Hold," with the mean target of about $20 signaling potential upside of not even 4% from the price at which it closed on Monday.
This article was created with the support of automated content tools from our partners at Sigma.AI. Together, our financial data and AI solutions help us to deliver more informed market headline analysis to readers faster than ever.
