Last week, markets punished investors who overlooked the PC market suppliers, instead betting on their play in AI.
Dell Technologies (DELL) lost 13.53% last week after posting third-quarter results. Though the firm met expectations, guidance is not so strong. Now that DELL stock is on sale after the dip, the market is discounting the tailwinds from AI server sales.
In the last quarter, Dell posted a 6% Q/Q drop in AI-related revenue. As mainstream server sales grow in 2025, demand for storage solutions will gain momentum. In the PC market, corporations will need to replace aging desktops and laptops. Microsoft (MSFT) is ending support for Windows 10. Customers will need Windows 11-compliant hardware.
HP Inc. (HPQ) fell for the same reasons. In Q4, revenue increased by 1.7% Y/Y. Looking ahead, however, commercial opportunities will increase HP’s sales in computing, systems, and print.
Zoom (ZM) lost 8% last week after posting results. Revenue grew by 2.6% Y/Y to $1.17 billion. FY 2025 total revenue is below consensus estimates. Zoom shares trade at a non-GAAP P/E of 15.41 times, below the sector median of 25 times. If the online meeting provider figures out how to take Microsoft’s Teams chat app market share, ZM stock will recover.
