HP Inc. (NYSE: HPQ) trades at a forward price-to-sales multiple of just 0.48X, while Apple Inc. (NASDAQ: AAPL) commands a premium 9.55X, creating one of the starkest valuation divides in the technology hardware sector.
That gap has not stopped HPQ from delivering the stronger share price return this year, with the stock surging 45.7% year-to-date against Apple’s still-respectable 26.5% gain.
HP’s outperformance is rooted in a business that is quietly defying the PC industry’s structural headwinds by chasing price rather than volume.
In the third quarter of fiscal 2026, HP’s Personal Systems division posted revenues of $11.77 billion, an 18.5% year-over-year increase, even as unit shipments fell 15.8%.
Average selling prices climbed 40.8% during that same period, reflecting a deliberate pivot toward premium commercial devices and higher-margin workstation categories.
HP also captured 2.6 percentage points of sequential market share in premium PCs and 1.8 points in workstations, reinforcing that the strategy is gaining traction in the segments that matter most for profitability.
Artificial intelligence is central to HP’s next growth phase, with AI-capable PCs accounting for 46% of Personal Systems shipments in the third quarter of fiscal 2026, up from 44% the previous quarter, and management targeting a mix above 70% by fiscal 2028.
The company is working with more than 150 software partners to expand AI use cases across its device lineup, adding an ecosystem dimension that could deepen customer relationships over time.
On the earnings outlook, the Zacks consensus pegs HP’s fiscal 2027 revenues at $60 billion, representing growth of 8.5%, though EPS growth of 3.5% to $3.23 reflects ongoing margin pressure from rising memory and storage costs.
Apple’s investment case rests on a fundamentally different foundation, anchored by a services engine that generated $30.74 billion in quarterly revenue during the third quarter of fiscal 2026, a 12.1% year-over-year increase that accounted for 28.1% of total company sales.
Paid subscriptions across Apple’s ecosystem surpassed 1.5 billion, spanning the App Store, AppleCare, Apple Music, video streaming, cloud storage and digital payments, providing the kind of recurring revenue base that justifies a premium valuation multiple.
Hardware is also delivering: Mac revenues jumped 28.7% year-over-year to $10.35 billion in the same quarter, driven by demand for the MacBook Neo and MacBook Pro, with Apple recording highs for both first-time buyers and returning upgraders.
Apple’s September 2026 launch of the iPhone 18 Pro introduced the A20 Pro chip, built on 2-nanometer technology with a second Neural Engine and significantly enhanced Siri capabilities designed to act across applications using personal context.
The company’s Private Cloud Compute architecture underpins its privacy-focused approach to AI, a differentiator that could prove meaningful as consumers grow more cautious about how their data is processed.
Despite those strengths, Apple’s near-term trajectory shows some deceleration, with management guiding for fourth-quarter fiscal 2026 revenue growth of 9-11%, a step down from the 16.4% reported in the June quarter, and supply constraints looming across iPhone, Mac and iPad.
Longer-term consensus estimates remain constructive, with fiscal 2027 EPS projected at $8.86, implying 18% growth, and those estimates have been revised upward over the past 30 days, in contrast to HP’s figures, which have held steady for 60 days.
Both stocks currently carry a Zacks Rank of 3, or Hold, leaving the differentiation between them largely a question of what an investor is buying: Apple’s durable, high-margin ecosystem at a premium price, or HP’s improving fundamentals at a fraction of the valuation.
For investors prioritizing value entry points, HP’s combination of AI PC momentum, premium commercial demand and that strikingly low price-to-sales ratio presents a compelling near-term case.
Apple’s long-term compounding story remains intact, but the valuation arithmetic currently favors the less celebrated of these two technology stalwarts.
