4 Best Computer Hardware Stocks to Buy in May

4 Best Computer Hardware Stocks to Buy in May

Posted On May 17, 2021 1:31 pm

The broader tech market staged a comeback yesterday after falling for three consecutive sessions because investors were reassured after United States’ jobless claims hit a fresh pandemic low. Tech stocks are also expected to continue dominating the market in the foreseeable future given that several companies are expected to continue with remote working structures even in the post-pandemic environment due to its benefits and convenience.

The use of internet of things (IoT), artificial intelligence (AI), and cloud-based products and services is expected to continue increasing, which will drive a growing need for computer hardware. According to Globe Newswire, the global computer hardware market is expected to hit $1,117.8 billion in 2025, growing at a 6% CAGR.

So, we think it could be wise to bet now on established computer hardware companies Dell Technologies Inc. (DELL – Get Rating), HP Inc. (HPQ – Get Rating), Synopsys, Inc. (SNPS – Get Rating), and Canon Inc. (CAJ – Get Rating). They  have the potential to capitalize on the industry’s growth.

Dell Technologies Inc. (DELL – Get Rating)

One of the world’s leading technology companies, DELL designs, develops, manufactures, markets, sells, and supports Information technology solutions, products, and services worldwide. It operates through two segments: Client Solutions and its Enterprise Solutions Group (ESG). On April 14, the company announced its plans to spin-off  its 81% equity ownership interest in VMware (VMW).

This month, it announced an expanded collaboration with global digital infrastructure company Equinix, Inc. (EQIX)  to broaden the availability of its APEX via EQIX’s International Business Exchange data centers. This is expected to help DELL deliver a secure, on-demand hybrid cloud solution. The company is expected to witness increasing demand for its solution as a result.

DELL’s  revenue increased 9% year-over-year to $26.10 billion for its fiscal fourth quarter, ended January 29. Its operating income grew 204% year-over-year to $2.20 billion, while its net income increased 223% year-over-year to $1.30 billion. The company’s EPS increased 191% year-over-year to $1.57.

For the about-to-be-reported quarter, ended April 30,  analysts expect DELL’s EPS and revenue to increase 17.2% and 12%, respectively, year-over-year to $1.57 and $23.36 billion. It surpassed the Street’s  EPS estimates in each of the trailing four quarters. The stock has gained nearly 135% over the past year to close yesterday’s trading session at $96.40.

DELL’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

The stock has an A grade for Growth, and a B grade for Value. Within the B-rated Technology – Hardware industry, DELL is ranked #4 of 48 stocks.

To see DELL’s ratings for Momentum, Sentiment, Stability and Quality, click here.

HP Inc. (HPQ – Get Rating)

HPQ not only provides personal computing and other access devices but also provides imaging and printing products, and other related technologies, solutions, and services internationally. The company operates through three segments: Personal Systems, Printing, and Corporate Investments.

On February 24, HPQ announced an agreement to acquire HyperX, which is the gaming division of Kingston Technology Company. The acquisition supports HPQ’s strategy to drive growth in its Personal Systems business, where its gaming and peripherals segments are expected to witness massive growth in the near-term owing to increasing demand from gamers worldwide.

The company is scheduled to announce its financial results for its fiscal second quarter (ended April 30, 2021) on May 27. Its net revenue increased 7% year-over-year to $15.60 billion for the first quarter, ended January 31. Its operating earnings grew 52.7% year-over-year to $1.30 billion, while its net earnings came in at…

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