Comparing Apple and HP: Which Stock is a Better Investment?

Apple (AAPL) and HP (HPQ) are prominent players in the personal computer (PC) market, which is projected to grow by 2.1% in shipments year-over-year by 2025, according to IDC. Global PC shipments are anticipated to increase at a compound annual growth rate (CAGR) of 0.4% from 2025 to 2029, reaching 422.6 million units. Commercial shipments are expected to rise by 4.3% to 138 million units, with a CAGR of 0.8% during the same period, potentially reaching 142.6 million units.

In the U.S., PC shipment growth is forecasted at 1.7%, or around 70.4 million units in 2025, according to Canalys. Shipment growth is projected to reach 1.9% in 2026, totaling 71.7 million units. Commercial shipments are expected to grow by 6.3% in 2025 and 1.4% in 2026, while the consumer market is likely to remain stable in 2025 and see a slight increase of 1.1% in 2026.

Key drivers for this growth include rising demand for artificial intelligence (AI) powered PCs and the end-of-service date for Microsoft Windows 10 in October 2025. Gartner forecasts that global shipments of AI PCs, which include those with embedded neural processing units, will reach 114 million units in 2025—a significant surge of 165.5% from 2024.

Analyzing Apple’s Stock Potential

Apple’s Mac business is experiencing strong demand, particularly for its M4, M4 Pro, and M4 Max chips. In March, Apple introduced the new MacBook Air featuring the M4 chip with a battery life of up to 18 hours and a 12MP Center Stage camera. Additionally, the company unveiled the Mac Studio, equipped with the M4 Max and the latest M3 Ultra chip, which is recognized as the most powerful chip Apple has created, featuring double neural engine cores and enhanced connectivity through Thunderbolt 5.

Apple’s robust Mac lineup helped the company increase its market share to 8.7% in Q1 2025, reflecting a 70 basis point year-over-year improvement. Shipments also grew by 14.1% to 5.5 million units. According to Gartner, Apple’s share gain was supported by a 20 basis point rise even as shipments rose by 7% year-over-year.

Furthermore, the global expansion of Apple’s Intelligence features through macOS Sequoia 15.4, now available in several new languages, suggests a positive outlook for the Mac segment’s future.

HP’s Growth Strategy Amid Challenges

HP is positioning itself to benefit from the rising interest in generative AI-enabled PCs, which could serve as a significant growth driver. The company anticipates that AI PCs will account for 40% to 60% of all PCs within the next three years. To capitalize on this trend, HP has launched several AI PCs this year and plans to broaden its AI portfolio further.

However, HP is not without risks, particularly regarding the ongoing U.S.-China trade tensions. The company depends heavily on China for the manufacturing of its PCs, printers, and related components. An escalation in tariffs could increase production costs, pressuring margins and potentially impacting consumers through higher prices.

In Q1 2025, HP reported a market share of 20.2%, improving by 20 basis points compared to the previous year. Shipments increased by 6.1% to 12.8 million units.

Recent Earnings Estimates for Both Companies

The Zacks Consensus Estimate for HP’s fiscal 2026 earnings is set at $3.39 per share, reflecting a 1.7% decline over the past month but indicating a 0.3% year-over-year increase over fiscal 2025.

HP Inc. Earnings Performance Chart

Apple’s estimated earnings for fiscal 2025 have decreased by 0.8% over the last 30 days, now standing at $7.12 per share, which suggests a growth of 5.48% compared to fiscal 2024.

Apple Inc. Earnings Performance Chart

Apple has consistently outperformed earnings estimates in the last four quarters, with an average surprise of 4.68%. In contrast, HP has lagged the consensus estimates three times, with an average negative surprise of 1.16% in the remaining quarter.

Stock Performance and Valuation Comparison

Year-to-date, Apple shares have seen a decline of 17.1%, underperforming HP, which has fallen 11.2%.

Performance Overview of AAPL and HPQ

Image Source: Zacks Investment Research

HP shares are currently valued more attractively compared to Apple. HPQ possesses a Value Score of B, while Apple has a Value Score of D, indicating a more stretched valuation. In terms of forward 12-month Price/Sales ratios, HPQ trades at 0.51X, significantly lower than Apple’s 7.60X.

Valuation Comparison of HPQ and AAPL

Image Source: Zacks Investment Research

Conclusion

Apple’s solid Mac portfolio and the introduction of advanced models bode well for the company’s future. Conversely, HP’s reliance on Chinese manufacturing amid geopolitical uncertainties poses significant challenges. With a Zacks Rank of #3 (Hold), Apple stands out as a stronger investment compared to HP, which carries a Zacks Rank of #5 (Strong Sell).