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HP, Dell's weak forecasts spark share selloff, doubts over PC market recovery

Economic Times · 24d

Shares of Dell and HP dropped after their respective forecasts indicated uncertainties regarding the market recovery driven by AI-enabled personal computers. Dell's stock tumbled 11% as the company predicted lower quarterly revenue, while HP's shares fell around 5% due to a quarterly profit projection that fell short of analyst expectations. The demand for traditional PCs has weakened post-pandemic, and AI-powered computers have yet to see widespread adoption. Analysts believe the market was disappointed with the lack of structural changes in PC demand from AI personal computers. Additionally, the anticipated computer upgrade cycle after Microsoft's transition to Windows 11 has been slower than expected. Despite this, Dell's AI server business showed strong performance, benefiting from increased demand for its servers from cloud companies focused on AI. Concerns were raised about a potential impact on Dell's sales and profit due to the slow rollout of Nvidia's next-generation AI chip, as well as a design flaw in the Blackwell chips. HP shares trade at a lower price-to-earnings ratio compared to Dell and Microsoft.