The cost that ate the parts list

Memory chips now account for roughly a third of what it costs to build a personal computer. HP Inc., which sells laptops, desktops, workstations, displays and printers to households and corporate technology departments, told investors in February that memory had reached about 35% of a PC's bill of materials — double the 15-18% of the quarter before — and that the share would keep climbing through the year. The research firm TrendForce expects contract prices for PC dynamic random-access memory (DRAM) to rise 15-20% in the third quarter alone, with server memory still climbing through the second half of 2027.

Manufacturers have responded by shipping fewer machines at higher prices. IDC counted 68.2m PCs shipped worldwide in the second quarter, down 4.9% year on year, the first contraction after nine consecutive quarters of growth. It then cut its 2026 shipment forecast to -11.3%, from -2.4% projected last November, and pushed any real recovery out to 2028. Even so, IDC expects the market's total value to rise to about $274bn. That is inflation, not a refresh cycle.

HP: the top line is real, the operating line is not

HP's most recent quarter, ended in April, was its best in two years on revenue: $14.41bn, up 9.0%, accelerating from 6.9%, 4.2% and 3.1% in the three quarters before it. Gross margin widened to 20.93% from 19.64% in the prior quarter. Below that, the picture reverses — operating income fell 6.4% year on year, after a 10.2% drop the quarter before, and operating margin slipped to 4.25% from 4.95%. Analysts model fiscal 2027 revenue of $57.79bn, up 0.2%, and earnings per share of $3.02, unchanged from this year.

That flat earnings stream is what has re-rated. On the same consensus figure, HP traded near 6.4x forward earnings at $19.26 in mid-February and about 10.0x at $30.11 last week — roughly 56% of multiple expansion with no change to the two-year earnings path. It is not an expensive stock in absolute terms: 10.99x trailing earnings, 8.54x trailing enterprise value to EBITDA, and a 13.7% trailing free-cash-flow yield. But nothing HP itself has published explains the month. Its last earnings call was 27 May. Its two biggest up-days were borrowed: a broad rally in AI hardware on 4 August that also lifted Dell 10% and Super Micro 9% with no company-specific catalyst, and a 13 August pop on a read-across from Lenovo's results. Strip those two sessions and the 30-day gain falls to roughly 12%. Morgan Stanley moved the other way, cutting HP to underweight with a $24 target and trimming its fiscal 2026 gross-margin estimate by 90 basis points, to 19.7%.

Corsair: one session, and the memory problem inside the print

Corsair Gaming, a $1.4bn maker of gaming keyboards, headsets, Stream Deck controllers and Elgato streaming gear as well as power supplies, cooling and memory modules for self-built PCs, is the month's outlier. Its entire 30-day gain came on 7 August, when the stock rose 35.25% on volume seven times normal after a clear beat and raise — adjusted EPS of $0.23 against $0.07 expected, and full-year guidance lifted to $0.85-0.94 from a $0.72 consensus. Excluding that day, the month is +2.6%.

The quarter itself is split down the middle by memory. Revenue actually fell 1.8%, to $314.3m. Record gross margin of 33.2% includes a one-off $15.6m tariff refund worth about 500 basis points; underlying margin is nearer 28%. Components and systems revenue dropped 9%, to $198.5m, because high DRAM prices are causing enthusiasts to defer builds — memory inflation is suppressing Corsair's volumes, not just its costs. Management guided memory gross margin down from about 23% this quarter to the high teens next. The peripherals half is the healthy one: revenue up 13%, to $115.9m, at 44.9% gross margin, led by Fanatec sim-racing gear. Cash flow is genuinely better — operating cash flow rose 148%, to $74.8m. The multiple has nearly doubled since May, from about 10x forward consensus at $7.36 to 18.0x; against the raised guidance midpoint it is closer to 14.5x, versus 41.4x trailing.

Logitech: the business the market ignored

Logitech, the Swiss maker of mice, keyboards, webcams, headsets and video-conference room systems, is the one delivering and the one going nowhere — down 3.6% over three months. Its June quarter brought $1.227bn of revenue, up 6.9%, with gross margin of 49.5% against 41.9% a year earlier and non-GAAP operating income up 44%, to $290m. Operating income on the reported basis grew 59.5% on 6.9% more revenue. The shares fell 5% the next day.

The reason is not memory — Logitech has secured its supply through fiscal 2027 and raised video-collaboration prices 13% in May to cover the cost. It is that a semiconductor supplier's plant closed in late June with no reopening date, costing about $20m of sales last quarter and up to $200m this one. Guidance reflects it: 0-3% constant-currency growth and gross margin down to roughly 44%. Management also rejects the premise that it is paid per PC shipped, noting that fewer than half of PCs have a mouse and under 30% a keyboard, and that attach rates rise about a point a year. Logitech trades at 18.77x trailing and 18.38x forward earnings — no re-rating at all, the mirror image of its two supposed segment-mates.

The common thread across all three is a cost, not a cycle, and it has shown up nearby before: CDW fell 12% on record sales as memory narrowed its margin, and Dell's gross margin dropped 337 basis points as memory prices roughly doubled. Upstream, the suppliers have stalled — over the past month Sandisk is down 2.0% and Western Digital 8.4%, while Micron is up 3.7%.

The setup

Where it stands — HP has re-rated on borrowed catalysts while PC units contract; Corsair's raise is real but memory margin is guided lower; Logitech's earnings outran its shares.

Would confirm — HP's late-August fiscal Q3 showing Personal Systems gross margin at or above 20.9% with operating income growing again.

Would invalidate — HP guiding fiscal 2027 gross margin toward Morgan Stanley's 19.7%, or IDC cutting its shipment forecast below -11.3%.

Watch next — HP's fiscal third-quarter report, due late August; Logitech's supplier reopening date; Corsair's Q4 memory margin.

Valuation — HP 10.99x trailing and 9.96x forward, against 6.4x forward in February; Corsair 41.4x trailing, 18.0x forward; Logitech 18.8x and 18.4x.