On November 27, 2024, shares of Dell and HP experienced significant declines following the companies’ forecasts that raised concerns about a potential recovery in the personal computer market. Dell’s stock fell 13%, while HP’s shares dropped 9%, as both companies reported quarterly revenue projections that fell short of market expectations.
- Dell and HP shares fell significantly.
- Dell forecasts revenue below market estimates.
- HP's profit projection missed expectations.
- Traditional PC demand has weakened post-pandemic.
- AI-powered PCs lack mass adoption currently.
- Dell's AI server business shows strong growth.
The recent downturn in Dell and HP’s stock prices highlights ongoing challenges in the personal computer market. After a surge in demand during the pandemic, traditional PC sales have weakened. Analysts note that while there is interest in AI-powered computers, mass adoption has yet to occur, leading to skepticism about a market recovery.
Key details include:
- Dell’s market value is expected to decrease by nearly $13 billion, down from $99.50 billion.
- HP’s market capitalization is projected to shrink by over $3 billion, from $37.68 billion.
- Both companies’ forecasts were below analyst estimates, contributing to the selloff.
Despite the challenges in the PC segment, Dell’s AI server business has shown strong growth, with a 58% revenue increase in its servers and networking unit. This growth is driven by demand from cloud companies leveraging AI technologies. However, some analysts caution that a slow rollout of Nvidia’s next-generation AI chip could negatively impact Dell’s sales in the future.
In contrast, HP’s stock trades at 10.84 times analysts’ profit estimates, compared to 15.51 for Dell and 30.94 for Microsoft, indicating differing market valuations among these tech companies. The overall outlook for the personal computer market remains uncertain as both firms navigate a challenging landscape.
The declines in Dell and HP shares underscore the ongoing struggles within the personal computer market, particularly as companies adapt to changing consumer demands and technological advancements. The outlook remains cautious as both firms work to regain market confidence.
