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4 Stocks to Focus on Solid Momentum in PC Shipments

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Demand for laptops, PCs and computer peripherals have seen astounding growth over the past few months, thanks to the pandemic that has compelled people to work and learn from homes.

According to the latest data compiled by two independent research firms — Gartner Inc. (IT - Free Report) and International Data Corporation (“IDC”) — the worldwide PC sales continued its growth momentum for the fourth consecutive quarter.

Per the preliminary data released by Gartner, PC shipments during the first quarter were up 32% year over year to 69.9 million units. The research firm stated that this increase was the fastest year-over-year growth recorded in more than two decades.

Per the data compiled by IDC, PC sales were up an astounding 55.2% year over year to 84 million units during the March-end quarter. This year-over-year jump came in higher than the previous quarter’s growth rate of 26.1%.

PC Sales Likely to Continue Momentum

The pandemic has necessitated the use of PC systems, be it for remote work, web-based learning, video conferencing, video gaming, social media, consumer entertainment and streaming or online shopping.

Moreover, as vaccine distribution and democratization take time, the risk of contracting the new COVID-19 mutant strain is expected to keep people confined to the safety of their homes, for quite some time now. This, in turn, will boost the prospects of the PC market in the days ahead.

On the heels of stellar consumer demand and supply shortages-led carry-forward of backlog into the remaining quarters of 2021, the momentum in the PC market is poised to sustain.

4 Stocks to Focus on as PC Sales Surge

The at-home culture is here to stay for a longer time than expected with no signs of the pandemic easing any time soon. Demand for PCs, monitors,and computer hardware and peripherals will only grow in such a situation.

Logitech (LOGI - Free Report) is benefiting from solid PC sales which are driving demand for its PC peripherals. In third-quarter fiscal 2021, revenues from Pointing Devices, Keyboards & Combos, PC Webcams, and Tablet and Other Accessories surged 38%, 40%, 309% and 342%, respectively, on a year-over-year basis.

Moreover, the company is gaining from impressive performance of its Gaming and Video Collaboration units. Further, the thriving cloud-based video conferencing services will continue to be the key catalyst for this Zacks Rank #1 (Strong Buy) company’s growth. You can see the complete list of today’s Zacks #1 Rank stocks here.

Additionally, demand for gaming products has shot up on the growing popularity of online video games and eSports amid the pandemic-induced stay-at-home wave. Also, Logitech’s partnerships with the likes of Zoom as well as cloud platform providers like Microsoft and Google are major positives.

Markedly, this $18.3-billion company recently raised its fiscal 2021 guidance and provided outlook for fiscal 2022. (Read More: Logitech Raises FY21 & Long-Term Financial Outlook)

The Zacks Consensus Estimate for Logitech’s fiscal 2022 earnings has risen 5 cents to $4.21 per share over the past 60 days.

Alphabet’s (GOOGL - Free Report) Chromebooks continued the stellar growth momentum in the first quarter of 2021 on the online-learning demand triggered by the pandemic-induced stay-at-home wave.

Notably, Chromebook shipments grew in the triple-digit percentage range year over year in the January-March quarter, courtesy of solid demand across the North American education market, per Gartner. In 2020, Chromebook shipments hit a record high of 30 million units, reflecting a year-over-year surge of 80%.

The Zacks Consensus Estimate for this Zacks Rank #2 (Buy) company’s 2021 earnings has moved 23 cents north to $69.28 per share over the past 30 days.

HP Inc. (HPQ - Free Report) is gaining from solid demand for PCs amid the remote-working and online-learning wave. Furthermore, stringent cost-control measures are anticipated to drive margins over the long run.

Product innovation and differentiations are the key catalysts that have helped HP maintain its competitive position in the PC market. During the first quarter, the company maintained its second position in the global PC market, with shipments increasing 34.6% on a year-over-year basis, per Gartner.

Moreover, this Zacks Rank #3 (Hold) company’s expectation of returning at least $1 billion to shareholders every quarter is encouraging.

The Zacks Consensus Estimate for its fiscal 2021 earnings has moved up approximately 24% to $3.31 per share in 60 days’ time.

Apple (AAPL - Free Report) continued to witness commendable growth in PC shipments in the March-end quarter. Per Gartner, during the quarter in discussion, the company expanded its market share in the PC market, which came in at 8%, up from the 7.1% seen in first-quarter 2020, with Mac shipments increasing a whopping 48.6%, year on year.

Robust adoption of the new MacBook Air and MacBook Pro acted as primary tailwind for this Zacks Rank #3 company. Strong customer satisfaction and sales expansion globally are other positives.

The Zacks Consensus Estimate for its fiscal 2021 earnings has been revised upward by 2 cents to $4.49 per share in the past 60 days.

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