The personal computer, which brought us thousands of percentage points of returns in the 1990s, is dead as an investment theme. In case you hadn't noticed. But that doesn't mean there is no reason to consider owning shares of Dell ( DELL), which have been stuck in a holding pattern for a year. Did I really say Dell? The mere mention of that single syllable elicits a variety of reactions from seasoned investors. In the mid-1990s, when many came into the market, it was nothing for the stock to rise $5 a day, well before the era of the neurotic Internet stock. The weeks of its earnings reports were exciting events. Shares rose 92,000% from 1990 to 1999. It made fortunes for ordinary people, launching thousands of BMW sales and down payments on first homes. If you've owned Dell for the past three years, on the other hand, you're probably sick of it. In a double-blind test, you couldn't distinguish its price chart from that of an electric utility. It's flatter than day-old Pepsi. The future will be different: Not as great as the '90s, but not as bad as the past 36 months, either. All that boring, sideways trading between $31 and $37 recently is probably accumulation, as long-term players regularly come into the stock at the bottom of the channel in anticipation of a new cycle of success. The company is unmooring from its roots as a PC vendor and moving up the value chain into high-demand enterprise storage and high-fashion consumer electronics.
It's not like the personal computer is disappearing, though. Globally, shipments are expected to reach 185 million units in 2004, fulfilling the wildest expectations of PC bulls of the early 1990s. Analysts at Gartner Group may have recently cut their PC sales growth estimates for the year to 12.6% from 13.4% in the wake of soft results witnessed throughout the economy, but let's get real: Double-digit growth, at four times the rate of U.S. GDP growth, is fantastic. The prosperous soft-drink industry is happy to post 5% annual growth. The beer industry grows at about a 1% pace.