HP has been completely left behind in the AI trade-- market cap of $20b is peanuts these days with the amount of cash flowing into anything AI adjacent. On top of that, options are incredibly cheap with most January strikes priced at 55% IV. All it would take is a couple of minor changes by management and I believe the market would aggressively rerate this stock. It wouldn't take much for it to go from $20b to $80b market cap ($25 -> $100 share price) if wall street changed the way they view this company.
In order to get a fresh look and rewrite the narrative, management would only need to deliver a few of these things for this stock to become a stonk:
\- ditch (shut down or spin off) the printer biz. it's high margin but is declining and is a major drag on the story
\- kill the dividend and announce a massive investment in AI with that cash. The high dividend currently makes it look like a yield trap, not a sexy AI play. If they can't find anything to do with the cash, at least use it to buyback shares, not pay a juicy dividend
\- Push the AI PC adoption story and include % of computers sold that are AI optimized in their earnings. Push to increase the refresh cycle of PCs and enterprise computers due to AI requirements.
If they do 2 of these 3 things, they could easily 4x from here. They already have the revenue and the size to explode, they just need a tiny bit of AI love to rocket. It's getting hard to find any AI adjacent play anymore that hasn't already 2-4x in the past 12 months, and HPQ is actually down 13% b/c of their traditionally boring narrative.
Long 500x Jan27 $50 calls at $.50
$25k purchase goes to $2.5mm if HPQ takes off to $100 by January.