Back to market on close. Shares of Dell are 8 and a half% higher on the day so far after a group of analysts raised its price targets on shares following the raising of its long-term guidance yesterday. Mazuo, Cityroup, Goldman Sachs, JP Morgan, Wells Fargo, and Bernstein all boost their targets and kept a buy or an overweight rating on shares.Dell has now gained more than 15% on the week and is up more than 40% in 2025. And with that, it's time for Options Corner. Joining us here is our lead market technic ...

Core Insights - The PC market in the U.S. is experiencing a mixed outlook, with a 15% year-on-year increase in desktop and laptop shipments in Q1 2025, reaching 16.9 million units, but an expected slowdown in overall growth to just 2% for the year due to weakened consumer spending and inventory pressures [1][2][5] - Business demand for PCs is anticipated to remain strong, with commercial PC shipments projected to grow by 8%, contrasting with a 4% decline in consumer PC shipments [1][5] - The transition to Windows 11 is progressing well among U.S. enterprises, which is seen as a positive signal for the industry, particularly for small and medium-sized businesses [2][4] Market Forecasts - For 2024 to 2026, the U.S. PC market is expected to show varied growth rates across segments: consumer market shipments are projected to decline by 4.2% in 2025, while commercial market shipments are expected to grow by 7.9% [5] - The total PC shipments in the U.S. are forecasted to reach 70.4 million units in 2025, with a slight overall growth of 1.8% [5] Consumer Behavior - Despite the impending end of support for Windows 10, consumer demand for PCs has not significantly increased, indicating that many users are indifferent to the change unless it directly impacts their experience [4] - Key drivers for PC purchases remain issues like battery life, device performance, and hardware failures, rather than software updates [4] Industry Challenges - Inflationary pressures and a pause in interest rate cuts by the Federal Reserve are affecting consumer spending on high-priced items like PCs [2] - Retail channels are experiencing high inventory levels, which may lead to pressure on manufacturers' sell-in volumes in the latter half of 2025 [2]

Core Insights - Dell Technologies (DELL) and HP (HPQ) are significant players in the personal computer market, with DELL focusing on a broader enterprise portfolio and HP concentrating on consumer PCs and printers [1] - The PC market is projected to grow from $222.64 billion in 2025 to $344.13 billion by 2030, at a CAGR of 9.1% [2] - The global PC market is expected to see a shipment growth of 4.1% in 2025, reaching 274 million units [3] Dell Technologies - DELL's AI prospects are strong, with expansion into enterprise deployments and edge computing [4] - The company has introduced new high-performance notebooks and desktops, enhancing productivity for enterprise customers [5] - DELL is benefiting from a PC-refresh cycle, with first-quarter fiscal 2026 CSG revenues at $12.50 billion, up 5% year over year, and commercial client revenues increasing 9% to $11.04 billion [6] - DELL's partnerships with companies like NVIDIA and Microsoft are enhancing its AI capabilities and enterprise AI adoption [7] HP Inc. - HPQ is focusing on innovative product launches, with a growing interest in generative AI-enabled PCs expected to drive demand [8] - The company forecasts that 40-60% of all PCs will be AI PCs in the next three years, launching several AI PCs this year [9][10] - HPQ's reliance on China for manufacturing poses risks if U.S.-China tariffs escalate, potentially impacting margins [11][12] Stock Performance and Valuation - Year-to-date, DELL shares have lost 2.9% and HPQ shares have lost 22.2%, attributed to a challenging macroeconomic environment [13] - DELL shares are trading at a forward Price/Sales ratio of 0.74X, while HPQ's is at 0.43X, indicating that both stocks are currently undervalued [16] - The Zacks Consensus Estimate for DELL's fiscal 2026 earnings is $9.25 per share, reflecting a 13.64% year-over-year increase, while HPQ's estimate for fiscal 2025 is $3.09 per share, indicating an 8.58% decline [19] Conclusion - Both DELL and HPQ are positioned to benefit from the PC market's growth, but DELL has stronger AI momentum and a diversified portfolio, making it a more attractive investment opportunity [20] - HPQ's dependence on China for manufacturing amid geopolitical tensions is a significant challenge [21]

Core Viewpoint - The global PC market experienced a significant growth in Q1 2025, with total shipments reaching 62.7 million units, a year-on-year increase of 9.4%, driven by preemptive shipping strategies by OEMs ahead of new tariff implementations [1][3]. Group 1: Market Performance - In Q1 2025, notebook shipments (including mobile workstations) reached 49.4 million units, up 10% year-on-year, while desktop shipments (including desktop workstations) totaled 13.3 million units, reflecting an 8% increase [1]. - Lenovo maintained its leading position in the global PC market with shipments of 15.2 million units, achieving an 11% growth. HP followed with 12.8 million units, growing 6% year-on-year. Dell's shipments rebounded to 9.5 million units, marking a 3% increase, while Apple saw a strong 22% growth, reaching 6.5 million units [3][4]. Group 2: Tariff Impact and OEM Strategies - The increase in shipments was largely attributed to OEMs accelerating their shipping schedules to the U.S. market in response to the first round of tariff policies announced by the Trump administration. This proactive approach allowed manufacturers to stock up before cost increases due to tariffs [1][3]. - As new tariffs are set to take effect, OEMs are expected to continue diversifying production away from China to mitigate cost pressures. By the end of 2025, it is anticipated that most PC manufacturers will have shifted their U.S. market shipments to production outside of China [3][4]. - HP's CEO Enrique Lores indicated that by the end of this year, 90% of HP's products sold in the U.S. will be produced outside of China, highlighting the ongoing shift in production strategies among major OEMs [3]. Group 3: Consumer Demand and SMB Challenges - The impact of tariffs on consumer demand is expected to become more pronounced, as rising prices for various goods will force consumers to weigh their spending on more expensive PCs against other daily expenses [1]. - Small and medium-sized businesses (SMBs) may face pressure to delay their device upgrades before Windows 10 reaches its end of service in October 2025. A survey indicated that 14% of SMB partners were unaware of the impending end of service, while 21% knew but had no upgrade plans [1].