3 Stocks to Buy on Solid PC Demand Amid Coronavirus Crisis

·5-min read

Demand for personal computers (PCs), laptops and computer peripherals has seen outstanding growth in the past year, thanks to the COVID-19 pandemic that has compelled people to work and learn from homes.

According to the latest data compiled by two independent research firms — International Data Corporation (“IDC”) and Gartner Inc. IT — the worldwide PC sales marked the fourth consecutive quarter of growth during the first quarter of 2021.

Per the preliminary data released by IDC, PC shipments during the January-March quarter were up 55.2% year over year to 84 million units. This year-over-year jump came in higher than the previous quarter’s growth rate of 26.1%.

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

PC Demand Likely to Sustain

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

Moreover, as vaccine distributions 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.

3 Stocks to Buy on Stellar PC Demand

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

Alphabet’s GOOGL 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.

According to data compiled by Gartner, Chromebook shipments grew in the triple-digit percentage range year over year during the January-March period, courtesy of solid demand across the North American education market. 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 #1 (Strong Buy) company’s 2021 earnings has moved 19 cents north to $89.46 per share over the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alphabet Inc. Price and Consensus

Alphabet Inc. Price and Consensus
Alphabet Inc. Price and Consensus

Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote

Apple AAPL continued to witness robust growth in PC shipments in the March-end quarter. Per Gartner, during the quarter, 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 shooting up 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 #2 (Buy) company. Strong customer satisfaction and sales expansion globally are other positives.

Notably, the company’s Mac sales soared 70.1% to $9.10 billion during second-quarter fiscal 2021 and accounted for 10.2% of its overall revenues. This year-over-year upswing was driven by robust adoption of the new Macs powered by M1 chip.

The Zacks Consensus Estimate for fiscal 2021 earnings has been revised upward by 7 cents to $5.17 per share in the past 30 days.

Apple Inc. Price and Consensus

Apple Inc. Price and Consensus
Apple Inc. Price and Consensus

Apple Inc. price-consensus-chart | Apple Inc. Quote

Logitech LOGI has been gaining from elevated demand for its Video Collaboration tools, mainly driven by the surging work-from-home and learn-from-home trends. Also, the PC peripheral market is witnessing strong traction, which is aiding top-line growth. Additionally, demand for gaming products has shot up on the growing popularity of online video games and eSports amid the stay-at-home scenario.

Notably, the company had registered a whopping 117% surge in fourth-quarter fiscal 2021 revenues and a 245% jump in non-GAAP earnings per share. The top and bottom lines also surpassed the respective Zacks Consensus Estimate.

We believe the thriving cloud-based video conferencing services will continue being the key catalyst. Rising adoption of new mobile platforms in both mature and emerging markets will further fuel demand for Logitech’s peripherals and accessories. Apart from these, partnerships with cloud providers like Zoom Video Communications ZM, Microsoft MSFT and Alphabet are major positives for this Zacks Rank #2 company.

The Zacks Consensus Estimate for Logitech’s fiscal 2022 earnings has moved up 30 cents to $4.52 per share in 60 days’ time.

Logitech International S.A. Price and Consensus

Logitech International S.A. Price and Consensus
Logitech International S.A. Price and Consensus

Logitech International S.A. price-consensus-chart | Logitech International S.A. Quote

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