This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why AMD, Nvidia and Seagate Will Benefit From a PC Shipment Rebound


NEW YORK (TheStreet) -- Shares of PC-dependent companies including Hewlett-Packard (HPQ) and Microsoft (MSFT) have been among the market's top performers in 2014. Both of these companies have been up by double-digits, as much as 27% and 15% respectively. Opportunistic investors knew something.

On Wednesday, the rest of the market gained that knowledge.

Market research firm Gartner said the decline in PC shipments have been stabilized. Not only does Gartner predict continued deceleration of the decline for the rest of 2014, the firm anticipated a significant rebound in 2015.

>>Apple TV Races to Regain Past Dominance as Roku, Google Take Lead

>>Yahoo!'s Alibaba Cash Could Trigger a Buying Binge in Tech

Ranjit Atwal, Gartner's research director noted that "2014 will be marked by a relative revival of the global PC market." He's right. Worldwide PC shipments are expected to decline 2.9% this year. It's not a great number. But considering 2013's decline was close to 10%, it's colossal victory.

Gartner also projects a modest 2.6% PC-shipment increase in 2014, going from 308 million units to 316 million. This would get global shipments almost back to 2013 levels, indicating that PCs, which were once proclaimed dead are alive and kicking.

This news tells me two things. First and the most obvious, the worst of this PC sales erosion is over. Secondly, and perhaps more important, there is still money to made in this industry, which should also bode well for other PC-dependent companies like semiconductors and hard drive manufacturers, among other segments.

Gartner's news is positive. While I don't expect PC sales to revert back to levels of a decade ago, large fortune 500 companies still rely on them to operate their businesses -- making companies like Advanced Micro Devices (AMD) and Nvidia (NVDA) solid if not sure bets to participate in a PC recovery.

Consider, even amid periods of weak PC sales, Nvidia offset the drought with strong demand within its Tegra chip line. The company's management already projects to grow earnings at a 7% annual rate. With the stock trading just two times its enterprise value and less than three times revenue, these shares are a bargain.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs