According to a new report from technology research company Gartner, PC sales jumped 3.6% year over year in the third quarter. The coronavirus pandemic is keeping everyone indoors, helping the work-and-learn from home culture gain prominence. If health experts are to be believed, the sooner we get used to this new normal the better.
Demand for personal computers and video collaboration products gained traction over the past few months as schools and offices were shut in a bid to prevent the spread of coronavirus. This sawlocked-down staff relying on personal computers and laptops.
Computer Shipments Grow
In spite of huge demand, it was difficult to buy computers, laptops and other peripherals as lockdowns imposed by other countries halted shipments. Moreover, manufacturing had come to a standstill, affecting overall sales of computers and related equipment.
However, sales bounced back in the second quarter and hit a record high in the third quarter. According to Gartner, PC makers shipped 71.4 million units in the third quarter. The United States accounted for the bulk of shipments. Of the total shipments, 16.5 million PCs were shipped to the United States, marking an 11.4% increase over the same period last year. That’s the fastest U.S. PC growth rate in a decade, according to Gartner.
Growth of mobile PCs surged 29%, though sales of desktops declined—as remote workers and students tended to favor laptops over desktops.
Companies Report Sales Growth
While a large section of the economy is battered by the pandemic, the tech sector seems to be its biggest beneficiary. Globally, Lenovo Group Ltd. LNVGY shipments were up 8.3% year over year to 18.3 million, making it the largest beneficiary of the trend. Hewlett Packard Enterprise Company HPE, Dell Technologies DELL, Apple, Inc. AAPL, and Acer rounded out the top five PC manufacturers.
The PC market has been declining on and off for the past decade as smartphones became dominant in many markets. However, this quarter, worldwide consumer demand for new PCs was the highest in five years, as the coronavirus pandemic and concurrent lockdowns drove demand for home entertainment and remote schooling.
Stocks to Watch
The at-home culture is here to stay for a longer time than expected with no signs of the pandemic easing. Demand for PCs, laptops, tablets and other peripherals will only grow in such a situation, helping these four stocks to gain.
Lenovo Group Ltd. is dedicated to building PCs and mobile Internet devices. Lenovo's business is built on product innovation, a highly efficient global supply chain and strong strategic execution.
The company’s expected earnings growth rate for the current year is 37.6%. The company’s shares have gained 36.7% in the past three months. Lenovo has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dell Technologies Inc. is a provider of information technology solutions. The company's operating segment consists of Client Solutions, Enterprise Solutions Group and Dell Software Group. The Client Solutions segment includes sales to commercial and consumer customers of desktops, thin client products, notebooks as well as services and third-party software and peripherals of Client Solutions hardware.
The company’s expected earnings growth rate for next year is 11.6%. The Zacks Consensus Estimate for current-year earnings has improved 8.7% over the past 60 days. Dell has a Zacks Rank #3.
Apple, Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories worldwide. Its signature products include iPhone, Mac and iPad.
The company’s expected earnings growth rate for the current year is 9.1%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. Apple has a Zacks Rank #3.
Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data from edge to cloud. The company offers industry-standard servers for multi-workload computing; mission-critical servers; storage solutions; and solutions for secondary workloads and traditional tape, storage networking, and disk products, such as HPE MSA and HPE XP.
The company’s expected earnings growth rate for next year is 12.9%. The Zacks Consensus Estimate for current-year earnings has improved 5.6% over the past 60 days. Hewlett Packardhas a Zacks Rank #3.
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