This Day On The Street
Continue to site
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

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 - Get Report) and Nvidia (NVDA - Get Report) 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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AMD $3.74 5.35%
NVDA $36.00 1.32%
STX $20.48 -5.93%
AAPL $93.64 -0.11%
FB $118.57 0.84%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs