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2 Stocks to Buy Right Now From the Prospering Computer Industry
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The Zacks Computer – Micro Computers industry players like Dell Technologies (DELL - Free Report) and HP (HPQ - Free Report) are benefiting from an ongoing commercial PC replacement cycle. Large enterprises continue to refresh aging PC fleets, while the Windows 11 transition remains a catalyst, particularly among small and medium-sized businesses. AI PCs and edge computing are becoming increasingly important demand drivers. Enterprises are adopting more capable PCs to handle AI, agentic and inference workloads locally. AI is emerging as an important smartphone replacement catalyst. However, rising memory and storage costs are pushing PC vendors toward higher prices and product reconfiguration. The smartphone industry faces supply and component-cost constraints. Memory costs are also rising sharply, creating pressure on device pricing and margins and creating headwinds for industry players.
Industry Description
The Zacks Computer – Micro Computers industry comprises companies that offer smartphones, desktops, laptops, printers and wearable devices. 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 Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better displays 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 displays 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 driving demand for AI-enabled devices. AMD, Qualcomm and Intel offer NPU chips to OEMs such as ASUS, Acer, Lenovo, Microsoft, HP and others building these AI-enabled devices. HP expects AI PCs to account for 60-70% of its PC mix in 2027 and more than 70% in 2028. 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 #30, which places it in the top 12% 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 13%.
Given the bright outlook, there are a number of stocks worth buying 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 46.2% over this period compared with the S&P 500’s return of 18.4% and the broader sector’s appreciation of 25.9%.
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 31.16X compared with the S&P 500’s 19.95X and the sector’s 20.73X.
Over the last five years, the industry has traded as high as 32.35X and as low as 19.73X, with the median being 26.78X, as the chart below shows.
Forward 12-Month Price-to-Earnings (P/E) Ratio
2 Computer Stocks to Buy Right Now
Dell Technologies: This Zacks Rank #1 (Strong Buy) company is benefiting from an ongoing commercial PC refresh cycle and expanding enterprise IT spending. You can see the complete list of today’s Zacks #1 Rank stocks here.
Large enterprise customers continue to replace aging PC fleets, driving double-digit demand growth across regions. At the same time, customers are increasingly viewing IT infrastructure as a source of productivity and competitive advantage, supporting higher spending across client devices, servers, storage and AI infrastructure. This bodes well for DELL’s prospects.
The Zacks Consensus Estimate for fiscal 2027 earnings has increased 34.8% to $25.34 per share over the past 30 days. The stock has appreciated 342% year to date.
Price and Consensus: DELL
HP: This Zacks Rank #1 company is riding on increasing demand for AI PCs, edge AI and agentic workloads. The shift of AI workloads from the cloud to devices is also improving the value proposition of AI PCs through lower token costs, reduced latency, stronger privacy and lower dependence on network connectivity.
The Windows 11 transition continues to support small and medium business demand, although roughly 70% of the refresh is already complete. HP expects this catalyst to be increasingly supplemented by demand for AI PCs and more capable devices for edge and agentic workloads, providing another growth avenue as the traditional Windows refresh matures.
The Zacks Consensus Estimate for fiscal 2026 earnings has increased 8.4% to $3.23 per share over the past 30 days. The stock has appreciated 42.6% year to date.
View the Zacks #1 Rank List
Image: Bigstock
2 Stocks to Buy Right Now From the Prospering Computer Industry
The Zacks Computer – Micro Computers industry players like Dell Technologies (DELL - Free Report) and HP (HPQ - Free Report) are benefiting from an ongoing commercial PC replacement cycle. Large enterprises continue to refresh aging PC fleets, while the Windows 11 transition remains a catalyst, particularly among small and medium-sized businesses. AI PCs and edge computing are becoming increasingly important demand drivers. Enterprises are adopting more capable PCs to handle AI, agentic and inference workloads locally. AI is emerging as an important smartphone replacement catalyst. However, rising memory and storage costs are pushing PC vendors toward higher prices and product reconfiguration. The smartphone industry faces supply and component-cost constraints. Memory costs are also rising sharply, creating pressure on device pricing and margins and creating headwinds for industry players.
Industry Description
The Zacks Computer – Micro Computers industry comprises companies that offer smartphones, desktops, laptops, printers and wearable devices. 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 Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better displays 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 displays 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 driving demand for AI-enabled devices. AMD, Qualcomm and Intel offer NPU chips to OEMs such as ASUS, Acer, Lenovo, Microsoft, HP and others building these AI-enabled devices. HP expects AI PCs to account for 60-70% of its PC mix in 2027 and more than 70% in 2028. 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 #30, which places it in the top 12% 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 13%.
Given the bright outlook, there are a number of stocks worth buying 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 46.2% over this period compared with the S&P 500’s return of 18.4% and the broader sector’s appreciation of 25.9%.
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 31.16X compared with the S&P 500’s 19.95X and the sector’s 20.73X.
Over the last five years, the industry has traded as high as 32.35X and as low as 19.73X, with the median being 26.78X, as the chart below shows.
Forward 12-Month Price-to-Earnings (P/E) Ratio
2 Computer Stocks to Buy Right Now
Dell Technologies: This Zacks Rank #1 (Strong Buy) company is benefiting from an ongoing commercial PC refresh cycle and expanding enterprise IT spending. You can see the complete list of today’s Zacks #1 Rank stocks here.
Large enterprise customers continue to replace aging PC fleets, driving double-digit demand growth across regions. At the same time, customers are increasingly viewing IT infrastructure as a source of productivity and competitive advantage, supporting higher spending across client devices, servers, storage and AI infrastructure. This bodes well for DELL’s prospects.
The Zacks Consensus Estimate for fiscal 2027 earnings has increased 34.8% to $25.34 per share over the past 30 days. The stock has appreciated 342% year to date.
Price and Consensus: DELL
HP: This Zacks Rank #1 company is riding on increasing demand for AI PCs, edge AI and agentic workloads. The shift of AI workloads from the cloud to devices is also improving the value proposition of AI PCs through lower token costs, reduced latency, stronger privacy and lower dependence on network connectivity.
The Windows 11 transition continues to support small and medium business demand, although roughly 70% of the refresh is already complete. HP expects this catalyst to be increasingly supplemented by demand for AI PCs and more capable devices for edge and agentic workloads, providing another growth avenue as the traditional Windows refresh matures.
The Zacks Consensus Estimate for fiscal 2026 earnings has increased 8.4% to $3.23 per share over the past 30 days. The stock has appreciated 42.6% year to date.
Price and Consensus: HPQ