HPQ's Bold Move into Expeditionary 3D Printing: A Hidden Growth Engine Emerges

The partnership between HP Inc. (NYSE:HPQ) and Firestorm Labs, announced on July 1, 2025, marks a critical pivot for HP's 3D printing division—and one that could unlock significant undervalued growth potential. By exclusively integrating HP's Multi Jet Fusion (MJF) technology into Firestorm's modular xCell manufacturing system, HP is positioning itself at the forefront of a nascent but rapidly growing market: expeditionary manufacturing. This alliance not only expands HP's addressable market but also creates a compelling narrative for investors to reassess its valuation.

The xCell System: A Mobile Manufacturing Revolution

The cornerstone of this partnership is Firestorm's xCell system—a scalable, containerized manufacturing platform that can operate in remote or contested environments.

. Housed in two 20-foot containers, the xCell combines HP's MJF 3D printing with drone technology, enabling on-demand production of critical components, medical supplies, and unmanned aerial systems (UAS). Its ability to run on generators, batteries, or traditional power makes it ideal for military outposts, disaster zones, and remote healthcare facilities.

For HP, this represents a strategic move beyond its traditional industrial 3D printing markets. The xCell's mobility and adaptability open doors to high-growth sectors like defense logistics, humanitarian aid, and even commercial applications such as offshore energy platforms. Firestorm's existing contracts, including a $100 million deal with the U.S. Air Force, underscore the demand for such solutions.

Why This Partnership Unlocks Undervalued Growth

HPQ's current valuation doesn't yet reflect the transformative potential of this collaboration. Here's why:

1. New Revenue Streams in High-Growth Sectors:
   The expeditionary manufacturing market is nascent but poised for rapid expansion. Analysts estimate that global spending on mobile 3D printing and field-deployable systems could hit $20 billion by 2030, driven by defense modernization and climate-related disasters. HP's exclusive deal with Firestorm secures its position as a leader in this space.

2. Scalability and Recurring Revenue:
   The xCell system isn't just a one-time hardware sale. HP stands to benefit from recurring revenue streams through proprietary materials, software licenses, and maintenance agreements. Firestorm's Series A funding round, backed by defense giants like Lockheed Martin, signals confidence in the system's commercial viability.

3. Reduced Logistics Costs for Clients:
   By enabling on-site production, the xCell system addresses a critical pain point for militaries and humanitarian organizations: the cost and risk of long supply chains. This creates a value proposition that's hard to ignore, potentially driving demand across industries.

HPQ's Undervalued Stock: A Buying Opportunity?

HPQ's stock has lagged behind broader tech indices in recent years, with investors focusing on its struggles in traditional PC markets. However, the Firestorm partnership introduces a high-margin, high-growth segment to its portfolio.

As of July 2025, HPQ trades at a P/E ratio of 11.5x—well below the industry average of 18.3x. This discount seems unwarranted given the potential upside from expeditionary manufacturing. Analysts at Morgan Stanley have already raised their price target to $25 per share, citing the Firestorm deal as a catalyst.

Risks and Considerations

• Market Adoption: While the defense sector is an early adopter, commercial and humanitarian applications may take longer to scale.
• Regulatory Hurdles: Export controls and international trade policies could complicate global sales.
• Execution Risks: HP must ensure seamless integration of its MJF systems into the xCell framework to avoid delays.

Investment Thesis: Buy HPQ with a Long-Term Horizon

HP's partnership with Firestorm Labs is a rare example of a tech giant leveraging its core strengths (high-quality 3D printing) to tap into an underpenetrated market. With a valuation that doesn't yet account for this growth, HPQ presents a compelling opportunity for investors willing to look beyond its legacy businesses.

Recommendation:
- Entry Point: Consider accumulating HPQ at current levels, with a target price of $25–$30 within 12–18 months.
- Triggers to Buy More: Positive updates on xCell deployments in U.S. military exercises (e.g., Northern Strike 24-2), or new contracts beyond defense sectors.
- Exit Strategy: Trim positions if the stock approaches $30 or if macroeconomic headwinds slow global spending on advanced manufacturing.

Final Thoughts

HP's move into expeditionary manufacturing isn't just a strategic shift—it's a redefinition of its role in the 3D printing ecosystem. By enabling real-time production in the most challenging environments, HPQ is betting on a future where distributed manufacturing becomes as essential as cloud computing. For investors, this is a chance to back a company poised to lead a $20 billion+ market, at a valuation that still lags its potential. The xCell system isn't just a product—it's a growth catalyst that could finally propel HPQ into the next chapter of its story.