Warren Buffett takes major stake in HP

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(Image credit: Shutterstock.com / Luca Lorenzelli)

HP Inc has a new, very high profile investor: Warren Buffett. The Oracle of Omaha's Berkshire Hathaway disclosed a substantial stake in the company, buying around 121 million shares, or 11% of the computing giant. 

The investment, which is worth around $4.2 billion, is a big show of confidence for HP, which has struggled in recent years after its split into two companies. 

HP Inc is the company that sells PCs and printers while Hewlett Packard Enterprise sells servers and enterprise services. 

On the up

"Berkshire Hathaway is one of the world's most respected investors and we welcome them as an investor," HP said in a statement

Buffett has previously mostly stayed away from making big bets on technology companies, with the notable exception of Apple, which he sees as more of a consumer brand. Berkshire's stake in Apple was worth $161 billion at the end of 2021. 

Berkshire had around $147.6 billion in cash at the end of 2021, according to the Financial Times, as the firm has struggled to find suitable investments that fit within its "value investing" thesis, which aims for high-quality, enduring companies that consumers love. 

HP recently acquired Poly, which makes video and audio equipment for remote working, for $1.7 billion, a sign that the company was focused on its future in a world where hybrid working in the norm. 

The pandemic has been a boon for HP, creating huge demand for business-focused laptops and desktops, which is exactly what HP is so good at producing. 

HP reported $17 billion in Q1 net revenue in 2022, an 8.8% rise from the year-ago quarter, and $1.1 billion in net earnings, which was flat. 

HP's laptop business generated $8.4 billion in revenue, a 14% year-over-year rise, compared to $2.8 billion for its desktops (up 17% YoY) and $534 million for its workstations. 

Max Slater-Robins has been writing about technology for nearly a decade at various outlets, covering the rise of the technology giants, trends in enterprise and SaaS companies, and much more besides. Originally from Suffolk, he currently lives in London and likes a good night out and walks in the countryside.