HP Inc. (HPQ) stock took a sharp dive during Thursday's trading session, plummeting 7.87% as investors reacted to ongoing concerns in the tech sector. This significant drop comes as part of a broader decline that has seen HP shares lose 16.1% over the past month, underperforming the overall Computer and Technology sector.

The steep decline can be attributed to several factors, with the primary concern being the impact of newly announced U.S. tariffs. These tariffs, particularly those affecting hardware imports from China, are expected to raise costs for both suppliers and end-users in the coming quarters. This development has introduced a wave of uncertainty in the market, potentially hurting HP's margins, especially in its Personal Systems segment. The tariff-induced price increases could also dampen overall demand for PCs, further pressuring HP's business outlook.

Despite these challenges, HP has shown some resilience in its recent performance. The company reported a 6.1% growth in PC shipments in the first quarter of 2025, maintaining its position as the second-largest PC vendor with a 20.2% market share. Looking ahead, HP is focusing on expanding its AI portfolio and investing in innovative products to capitalize on the growing AI personal computers market. While the current market conditions present significant headwinds, HP's strategic initiatives in AI and commercial PC demand could provide some support for the company's long-term prospects.