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3 Stocks to Watch as Strong Demand Pushes PC Shipments

Sales of personal computers rebounded strongly in the quarter ended June. After offices and schools across the United States were forced to close down because of the coronavirus-led lockdown, the number of employees working from home surged along with the sheer volume of students engaged in online learning.

This spike in demand for personal computers has pushed some information technology stocks to the forefront, which could do better in the near future. Hence one should keep an eye on these stocks for now.

Strong Uptick in PC Sales in Q2 2020

According to two leading industry-research firms in the country, Gartner Inc. and International Data Corp., personal computer shipments jumped significantly during second-quarter 2020.

Gartner reported global PC shipments of 64.8 million units during Q2, which were up 28% on a year-over-year basis, driven by sales in Europe, Africa and the Middle East. IDC reported a different figure, stating that PC shipments rose 11.2% to hit 72.3 million shipments for the quarter.

The difference in the figures by both firms lies in the way they define the PC market. For example, Gartner considers shipments of desktop PCs, notebooks and ultramobile devices such as the Microsoft Surface under the umbrella of its “PC market” but does not acknowledge sales of Chromebook or iPads.

On the other hand, IDC defines personal computers as desktops, notebooks, Chromebooks and workstations, but does not take into account tablets or Intel x86 servers.

According to both firms, HP Inc. HPQ and Lenovo were the top sellers of personal computers in the last quarter. Lenovo grabbed 25% market share, while HP accounted for 24.9%, per Gartner. However, IDC placed HP on top with 25% market share, followed by Lenovo’s 24.1%.

Apart from the two companies mentioned above, Dell Technologies Inc. DELL, Apple Inc. AAPL and Acer Inc. made it to the top five companies benefiting from remarkable sales of personal computers in second-quarter 2020, according to both firms.

Could PC Shipments Surge Further in the Near Future?

With coronavirus cases in the United States crossing three million this week, some of the earlier social distancing measures have been coming back. Uncertainty over an economic recovery is rising as well, especially with the infectious disease creating chaos in the domestic economy.

In such a scenario, it is evident that more people will try their best to work from home instead of heading out to the office. In addition, although schools around the country are debating to reopen campuses in the fall, schools could still offer a mix of in-person and remote learning in a bid to limit the size of a class and comply with social-distancing measures from the Centers for Disease Control and Prevention.

Therefore, one may anticipate that demand for PC sales wouldn’t lag in the near future.

3 Stocks to Watch

We have, thus, chosen three stocks that are benefiting from the surge in PC shipments. All these stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Apple belongs to the Zacks Computer - Mini computers industry. The company has an expected earnings growth rate of 23.7% for the next year. The Zacks Consensus Estimate for the company’s current-year earnings has moved 0.2% north in the past 30 days.

DellTechnologies belongs to the Zacks Computers - IT Services industry. The company has an expected earnings growth rate of 6.8% for the next year. The Zacks Consensus Estimate for the company’s current-year earnings has moved 5.6% north in the past 30 days.

HP belongs to the Zacks Computer - Mini computers industry. The company has an expected earnings growth rate of 5.7% for the next year. The Zacks Consensus Estimate for the company’s current-year earnings has moved 0.5% north in the past 30 days.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>


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