A finite element model is developed by Abaqus software to investigate the effect of laser power density on the residual principal stress distribution on the surface around the hole. Laser peening (LP) experiments under different power densities are conducted, and the residual stresses of feature points around holes are measured along three directions by X-ray diffraction stress analyzer, and the corresponding principal stress of each test point is calculated. The results indicate that the residual stress is anisotropic on the surface around the hole after LP. The minimum residual principal stress is an effective indicator to characterize the LP effect, which decreases with the increment of laser power density. In addition, a typical residual compressive stress ring occurs around the hole after LP, where the minimum residual principal stress value is obviously less than that in other peening zones. When the laser power density exceeds a certain threshold value, this ring has a tendency to be away from the hole wall.