Personal computer shipments have accelerated for four straight quarters, a sign that a PC refresh cycle is underway. The PC sales rebound is positive for Dell stock and HP stock.
In the third quarter, global PC shipments rose 9.4% year over year, according to research firm IDC. That compares with growth of 6.5% in Q2, 4.9% in Q1 and 1.8% in the fourth quarter of 2024. Before that, PC shipments dropped 2.4% year over year in Q3 2024.
One reason behind the PC sales boost is the end of support for Microsoft's 10-year-old Windows 10 operating system. That officially occurred on Tuesday but was announced in May 2024 for users to prepare for its retirement.
The end of support for Windows 10 is giving consumers and businesses a reason to upgrade to AI PCs running Windows 11.
In addition to helping computer makers like Dell and HP, the upgrade cycle is a boon to AMD and Intel, which make central processing units for PCs.
In a client note, Loop Capital Markets analyst John Donovan said most of the PC upgrade activity has been from consumers to date, but the corporate refresh has just begun.
"Q4 should follow a similar path as corporations move to beat the end of Windows (10) support," Donovan said in a report Thursday. "Our latest survey work has shown massive upside in expectations … The outlook is far more exuberant than at any point over the past 2-4 years."
Growth drivers for PC sales include "euphoria surrounding AI PC solutions" and the Windows 11 refresh, "which should pick up steam through the balance of 2025 and continue well into 2026," he said.
On Tuesday, HSBC analyst Abhishek Shukla upgraded HP stock to buy from hold, saying PC and printer sales appear to be better than expected. He also raised his price target on HP stock to 30 from 28.10.
On the stock market today, HP stock rose 4.4% to close at 28.54. Meanwhile, Dell stock retreated 3% to close at 148.77.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
