H-P's Turnaround Rings True

Updated from 7:09 a.m. EST

It took nearly five years for Hewlett-Packard to go from aging but respected tech giant to over-the-hill and irrelevant dinosaur. The silver lining to such a fate is that the company's turnaround might turn out to be just as long-lasting.

H-P's stock has emerged as one of the most unlikely stars of the tech sector for 2005, rising 34% in the past six months. Not every company with $87 billion in revenue sees that kind of a gain. And that performance isn't far behind Google , everyone's favorite runaway stock, which is up 39%; and it's even better than the 31% rally seen in Motorola , which is being hailed as the turnaround of the year.

Compared with its peers, H-P's rally since June is even more striking. IBM is up 19% and Dell is down 22%. And that adds up to an impressive first act from H-P CEO Mark Hurd. At the beginning of 2005, if you had polled investors on which of the above stocks would be up more than 40% at almost year-end, H-P almost certainly would have lost the vote. ...