HP (HPQ) Lags as AI Tailwinds Bypass Growth Amid Rising Costs and Weak 2026 Outlook

The Harbor Capital Advisors released its “Mid Cap Value Fund’s” Q4 2025 investor letter. A copy of the letter can be downloaded here. Harbor Mid Cap Value Fund, subadvised by LSV Asset Management, delivered solid outperformance in the fourth quarter of 2025, with the Institutional Class returning 4.07% versus 1.42% for the Russell Midcap Value Index, benefiting from strength in value stocks as the Russell Midcap Growth Index declined 3.7% during the period. U.S. equities broadly advanced, with the S&P 500 Index rising 2.7% in the quarter and 17.9% for the full year, while mid-caps lagged, with the Russell Midcap Index up just 0.2% in Q4. For 2025, the Fund gained 15.95% (Institutional Class), outperforming the benchmark’s 11.05% return. Attribution data show a total quarterly excess return of 2.82%, largely from selection effects, underscoring the manager’s quantitative value discipline focused on fundamental undervaluation, improving momentum, and risk control. Looking ahead, management noted that while AI-driven large-cap leadership has elevated valuations in certain segments, mid- and small-cap value stocks continue to trade at more attractive multiples, positioning the Fund to capitalize on opportunities within economically sensitive and cash-generative businesses. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Harbor Capital Advisors' Mid Cap Value Fund highlighted stocks like HP Inc. (NYSE:HPQ). HP Inc. (NYSE:HPQ) is a technology company offering personal computing devices, printers, and related solutions for consumers and businesses worldwide. The one-month return of HP Inc. (NYSE:HPQ) was -3.24% while its shares traded between $17.56 and $31.43 over the last 52 weeks. On January 26, 2026, HP Inc. (NYSE:HPQ) stock closed at approximately $18.81 per share, with a market capitalization of about $17.58 billion.

Harbor Capital Advisors' Mid Cap Value Fund stated the following regarding HP Inc. (NYSE:HPQ) in its Q4 2025 investor letter:

While several Fund holdings struggled — including HP Inc. (NYSE:HPQ) in the Information Technology sector. HP has not benefited much from the AI frenzy like other technology companies. The company has seen rising costs and projected lower-than-expected earnings for 2026. We did not make any changes to our position in HP and continue to hold the stock in the Fund.

HP Inc. (NYSE:HPQ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held HP Inc. (NYSE:HPQ)  at the end of the fourth quarter, which was 42 in the previous quarter. While we acknowledge the risk and potential of HP Inc. (NYSE:HPQ)  as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered HP Inc. (NYSE:HPQ) and shared the list of best affordable tech stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.