HP's Hybrid AI Strategy Seen Supporting Shift Toward Higher-End PCs, RBC Says

11:15 AM EDT, 10/16/2026 (MT Newswires) -- HP's (HPQ) "structural advantage" in hybrid AI positions the company to maintain its leadership in AI personal computers, RBC Capital Markets said Thursday in a report. The company's hybrid AI architecture is built on the premise that "AI workloads will increasingly split between cloud and edge driven by rising token costs, data center capacity constraints and enterprise data sovereignty concerns," the report said. HP's "strategy addresses AI workloads through ongoing innovation in PCs, ecosystem partnerships, and agent-capable devices that structurally expand revenue per unit," RBC said after hosting a call with senior company officials. AI-enabled hardware may also serve as an "entry point to a software and services attach flywheel that is structurally higher margin and more recurring than hardware alone," which will likely support solid free cash flow generation and shareholder-friendly capital allocation, the report said. RBC has a sector perform rating on HP stock and $33 price target. Price: 30.55, Change: -0.30, Percent Change: -0.97