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2 Stocks to Watch Right Now From the Prospering Computer Industry
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The Zacks Computer – Micro Computers industry players like Apple (AAPL - Free Report) and Dell Technologies (DELL - Free Report) are benefiting from steady demand for enterprise devices, including laptops, tablets and smartphones. The improving availability of 5G-enabled smartphones has been a key catalyst for industry participants. The launch of foldable and artificial intelligence (AI) and machine learning-infused smartphones, tablets, wearables, hearables and PCs is a major growth driver for industry participants. However, waning demand for consumer PCs is a headwind. Heightened geopolitical challenges post-U.S. President Donald Trump’s decision to levy tariffs on trade partners are expected to hurt industry participants. Weak demand in China has been a headwind.
Industry Description
The Zacks Computer – Micro Computers industry comprises companies that offer smartphones, desktops, laptops, printers, wearables and 3-D printers. Such devices are based on either iOS, MacOS, iPadOS, WatchOS, Microsoft Windows, or Google Chrome and Android operating systems. The companies predominantly use processors from Apple, Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones. This has been well-supported by faster mobile processors. Laptops, both consumer and commercial, benefit from faster processors, sleek designs and expanded storage facilities. The addition of healthcare features has been driving the demand for wearables.
3 Micro Computer Industry Trends to Watch
Enterprise Adoption Remains Healthy: Strong enterprise demand has been benefiting the industry participants. The growing adoption of a hybrid working environment bodes well for the players, as demand for laptops and tablets is expected to increase. Demand for smart devices that offer facial recognition, retina scans or finger impressions to verify the user for biometrics is gaining traction as enterprises enhance security.
Impressive Form Factor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. This has been well-supported by faster mobile processors from Qualcomm, NVIDIA, Apple and Samsung. Improved Internet penetration and speed, along with the evolution of mobile apps, have made smartphones indispensable for consumers. Improved graphics quality is making smartphones suitable for playing sophisticated games. This is driving the demand for high-end smartphones and opening up significant opportunities for device makers.
AI-enabled PCs to Boost Demand: Personal computers (desktops and laptops), be they Windows or Apple’s MacOS-based ones, are expected to benefit from AI infusion. The addition of neural processing units (NPUs), which are dedicated units to manage AI-related tasks, in PCs is a driving demand for AI-enabled devices. AMD, Qualcomm and Intel offer NPU chips with OEMs such as ASUS, Acer, Lenovo, Microsoft, HP and others building these AI-enabled devices. Canalys expects AI-capable PC shipments to make up 50% of PC shipments in 2026. This offers significant growth opportunities for industry participants.
Zacks Industry Rank Indicates Bright Prospect
The Zacks Computer – Micro Computers industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #24, which places it in the top 10% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since Dec. 31, 2025, the Zacks Consensus Estimate for this industry’s 2026 earnings has moved north by 9.3%.
Given the bright outlook, there are a number of stocks worth watching in the industry. But before we present those stocks, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector and S&P 500
The Zacks Computer – Micro Computers industry has outperformed the broader Zacks Computer and Technology sector, as well as the S&P 500, over the past year.
The industry has appreciated 55.6% over this period compared with the S&P 500’s return of 27.7% and the broader sector’s appreciation of 44.4%.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward 12-month P/E, which is a commonly used multiple for valuing computer stocks, we see that the industry is currently trading at 30.51X compared with the S&P 500’s 21.34X and the sector’s 24.68X.
Over the last five years, the industry has traded as high as 33.12X and as low as 25.78X, with the median being 29.2X, as the chart below shows.
Forward 12-Month Price-to-Earnings (P/E) Ratio
2 Computer Stocks to Watch Right Now
Dell Technologies: This Zacks Rank #1 (Strong Buy) company is benefiting from strong demand for AI servers, driven by ongoing digital transformation and heightened interest in generative AI applications. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the first quarter of fiscal 2027, Dell Technologies booked $24.4 billion of AI orders, delivered $16.1 billion of AI server revenues, and ended with a $51.3 billion AI backlog. Management raised fiscal 2027 revenue guidance to $165-$169 billion and lifted expected AI server revenue to about $60 billion.
The Zacks Consensus Estimate for fiscal 2027 earnings has increased 45.2% to $18.66 per share over the past 30 days. The stock has appreciated 233.1% year to date.
Price and Consensus: DELL
Apple: This Zacks Rank #3 (Hold) company expects June quarter (third-quarter fiscal 2026) revenue growth in the mid-teens, with Services rising at a similar pace after adjusting for foreign exchange. New products such as iPhone 17e and MacBook Neo, plus Apple Business, can expand ecosystem engagement over time.
Apple continues to return cash through dividends and buybacks, which can support the stock when operating results hold up. At the same time, supply constraints, higher component costs and an uncertain tariff backdrop can weigh on availability and margins.
The Zacks Consensus Estimate for fiscal 2026 earnings has increased by a penny to $8.75 per share over the past 30 days. The stock has appreciated 8.8% year to date.
View the Zacks #1 Rank List
Image: Bigstock
2 Stocks to Watch Right Now From the Prospering Computer Industry
The Zacks Computer – Micro Computers industry players like Apple (AAPL - Free Report) and Dell Technologies (DELL - Free Report) are benefiting from steady demand for enterprise devices, including laptops, tablets and smartphones. The improving availability of 5G-enabled smartphones has been a key catalyst for industry participants. The launch of foldable and artificial intelligence (AI) and machine learning-infused smartphones, tablets, wearables, hearables and PCs is a major growth driver for industry participants. However, waning demand for consumer PCs is a headwind. Heightened geopolitical challenges post-U.S. President Donald Trump’s decision to levy tariffs on trade partners are expected to hurt industry participants. Weak demand in China has been a headwind.
Industry Description
The Zacks Computer – Micro Computers industry comprises companies that offer smartphones, desktops, laptops, printers, wearables and 3-D printers. Such devices are based on either iOS, MacOS, iPadOS, WatchOS, Microsoft Windows, or Google Chrome and Android operating systems. The companies predominantly use processors from Apple, Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones. This has been well-supported by faster mobile processors. Laptops, both consumer and commercial, benefit from faster processors, sleek designs and expanded storage facilities. The addition of healthcare features has been driving the demand for wearables.
3 Micro Computer Industry Trends to Watch
Enterprise Adoption Remains Healthy: Strong enterprise demand has been benefiting the industry participants. The growing adoption of a hybrid working environment bodes well for the players, as demand for laptops and tablets is expected to increase. Demand for smart devices that offer facial recognition, retina scans or finger impressions to verify the user for biometrics is gaining traction as enterprises enhance security.
Impressive Form Factor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. This has been well-supported by faster mobile processors from Qualcomm, NVIDIA, Apple and Samsung. Improved Internet penetration and speed, along with the evolution of mobile apps, have made smartphones indispensable for consumers. Improved graphics quality is making smartphones suitable for playing sophisticated games. This is driving the demand for high-end smartphones and opening up significant opportunities for device makers.
AI-enabled PCs to Boost Demand: Personal computers (desktops and laptops), be they Windows or Apple’s MacOS-based ones, are expected to benefit from AI infusion. The addition of neural processing units (NPUs), which are dedicated units to manage AI-related tasks, in PCs is a driving demand for AI-enabled devices. AMD, Qualcomm and Intel offer NPU chips with OEMs such as ASUS, Acer, Lenovo, Microsoft, HP and others building these AI-enabled devices. Canalys expects AI-capable PC shipments to make up 50% of PC shipments in 2026. This offers significant growth opportunities for industry participants.
Zacks Industry Rank Indicates Bright Prospect
The Zacks Computer – Micro Computers industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #24, which places it in the top 10% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since Dec. 31, 2025, the Zacks Consensus Estimate for this industry’s 2026 earnings has moved north by 9.3%.
Given the bright outlook, there are a number of stocks worth watching in the industry. But before we present those stocks, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector and S&P 500
The Zacks Computer – Micro Computers industry has outperformed the broader Zacks Computer and Technology sector, as well as the S&P 500, over the past year.
The industry has appreciated 55.6% over this period compared with the S&P 500’s return of 27.7% and the broader sector’s appreciation of 44.4%.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward 12-month P/E, which is a commonly used multiple for valuing computer stocks, we see that the industry is currently trading at 30.51X compared with the S&P 500’s 21.34X and the sector’s 24.68X.
Over the last five years, the industry has traded as high as 33.12X and as low as 25.78X, with the median being 29.2X, as the chart below shows.
Forward 12-Month Price-to-Earnings (P/E) Ratio
2 Computer Stocks to Watch Right Now
Dell Technologies: This Zacks Rank #1 (Strong Buy) company is benefiting from strong demand for AI servers, driven by ongoing digital transformation and heightened interest in generative AI applications. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the first quarter of fiscal 2027, Dell Technologies booked $24.4 billion of AI orders, delivered $16.1 billion of AI server revenues, and ended with a $51.3 billion AI backlog. Management raised fiscal 2027 revenue guidance to $165-$169 billion and lifted expected AI server revenue to about $60 billion.
The Zacks Consensus Estimate for fiscal 2027 earnings has increased 45.2% to $18.66 per share over the past 30 days. The stock has appreciated 233.1% year to date.
Price and Consensus: DELL
Apple: This Zacks Rank #3 (Hold) company expects June quarter (third-quarter fiscal 2026) revenue growth in the mid-teens, with Services rising at a similar pace after adjusting for foreign exchange. New products such as iPhone 17e and MacBook Neo, plus Apple Business, can expand ecosystem engagement over time.
Apple continues to return cash through dividends and buybacks, which can support the stock when operating results hold up. At the same time, supply constraints, higher component costs and an uncertain tariff backdrop can weigh on availability and margins.
The Zacks Consensus Estimate for fiscal 2026 earnings has increased by a penny to $8.75 per share over the past 30 days. The stock has appreciated 8.8% year to date.
Price and Consensus: AAPL