HP Inc's stock tumbled 5.6% in post-market trading on Tuesday, as investors reacted negatively to the company's cautious financial outlook despite reporting better-than-expected first-quarter results.

The decline came after HP reported fiscal Q1 revenue and adjusted earnings that surpassed analyst estimates, driven by growth in its personal systems business. However, management stated that it now expects full-year fiscal 2026 results to be at the low end of its prior guidance range, citing an increasingly fluid operating environment.

The primary concerns weighing on the outlook are sharply rising memory chip costs, fueled by surging artificial intelligence demand, and ongoing uncertainty from U.S. trade regulations and tariffs. The company indicated these headwinds are likely to persist through the fiscal year and potentially into the next, pressuring margins and overshadowing the positive quarterly performance.