Could you try to see if this could be the issue?

In Windows, search for and open the Device Manager.
Click the arrow next to Keyboards and double-click the name of your keyboard.
Click the Power Management tab and make sure that the box next to "Allow this device to wake the computer" is checked.

I checked both the keyboard and mouse, both are setup to wake the computer. I am using a BT mouse, not sure if that has anything to do with anything. 

I have an Acer laptop that wakes up on BT mouse connected to USB... I don't remember if I had to change settings in advanced power management or not. (see pic)

I don't have that option in my settings. This is all I have...

I knew that the options here might vary, but I thought the USB setting was default. The screenshot above is from my stationary PC and here's my laptop. Got even more options...

Seems to be some other setting(s) or program(s) limiting your power management options or that this is a limitation for notebooks.

Kona...you may have to uncheck those settings...and reset them.  Sometimes what is shown and what is set can differ.

Probably will need to reboot inbetween as well...

Jafo I tried your suggestion with no improvements. Still getting a BSOD when coming out of sleep mode. 

That's more than 'just' not waking up.....a BSOD means you have a hardware driver/OS issue...

Should I reinstall Windows then?

That's normally a 'last resort'...before then you need to look closely at what was recently changed on your system...new proggies...drivers....settings...win updates...and maybe revert to an earlier 'restore' prior to things going BSOD.

Simply failing to wake up after sleep from mouse input is often 'just' a USB driver not working as it should...

Talked with HP about the notebook. Seems my SSD is faulty. So it's going in for service. :/