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HEXUS.sharewatch: PC stocks hit the rocks

by Scott Bicheno on 4 April 2011, 13:53

Tags: Dell (NASDAQ:DELL), Acer (TPE:2353), AMD (NYSE:AMD)

Quick Link: HEXUS.net/qa5ft

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There have been better times to be a PC OEM. The apparently forced resignation of former Acer CEO Gianfranco Lanci, for failing to adapt sufficiently to the mobile device seismic shift currently underway in the tech industry, seemed symptomatic of the dilemma faced by the traditional PC industry.

People can now perform a lot of their computing needs on devices other than PCs and those devices - smartphones and tablets - are selling in huge volumes. At the same time PC sales have been below expectations since the second half of this year, and this is having a profound effect on the bottom lines of companies heavily exposed to the mainstream consumer notebook market.

This can't be a coincidence, and nor is the fact that the biggest losers among our shares last week all have heavy exposure to the PC sector. We only use US-listed stocks to avoid currency issues, but Acer's shares fell by over 20 percent last week.

We feel that HP and Dell have experienced a knock-on effect to their share prices, as have AMD, Intel and NVIDIA, who derive much of their sales from the PC market. Interestingly Apple also had a rare down week, while Microsoft was less affected than the PC hardware companies.

At time of writing AMD's shares seemed unaffected by the change in its business relationship with GlobalFoundries.

Company Listing Share price 14/3/11 Share price 21/3/11 Share price 28/3/11 Share price 4/4/11 7-day change Market cap (bn)
AMD AMD 8.65 8.55 8.88 8.36 -5.9% 5.74
Apple AAPL 351.99 330.67 351.54 344.56 -2.0% 317.44
ARM ARMH 25.75 24.85 26.51 27.92 5.3% 12.52
Avnet AVT 33.18 32.03 33.84 33.64 -0.6% 5.11
Cisco CSCO 17.95 17.14 17.28 17.04 -1.4% 94.20
Dell DELL 15.28 14.51 15.06 14.34 -4.8% 27.34
Google GOOG 576.71 561.06 579.74 591.80 2.1% 190.28
HP HPQ 41.73 41.32 42.53 40.98 -3.6% 88.68
IBM IBM 162.43 155.89 162.18 164.27 1.3% 200.33
Ingram Micro IM 20.11 19.83 20.62 20.91 1.4% 3.33
Intel INTC 20.87 19.93 20.37 19.72 -3.2% 108.22
Microsoft MSFT 25.68 24.80 25.62 25.48 -0.5% 214.09
Nokia NOK 8.49 8.28 8.35 8.55 2.4% 32.48
Nvidia NVDA 18.05 17.62 18.63 18.20 -2.3% 10.76
Oracle ORCL 31.91 30.76 32.64 34.02 4.2% 172.16
Qualcomm QCOM 53.61 51.71 52.75 54.47 3.3% 89.53
Tech Data TECD 49.18 48.37 49.78 50.98 2.4% 2.38
Dow .DJI 12044.40 11858.52 12220.59 12376.72 1.3% N/A
FTSE 100 .FTSE 5828.67 5718.13 5900.76 6009.92 1.8% N/A
NASDAQ .IXIC 2715.61 2643.67 2743.06 2789.60 1.7% N/A


HEXUS Forums :: 5 Comments

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And let us not forget the cloud. Why have a powerful new PC when all the data processing can be done in an instantly-scalable virtualised datacenter?
Steve
And let us not forget the cloud. Why have a powerful new PC when all the data processing can be done in an instantly-scalable virtualised datacenter?

Many reasons, although I don't expect you actually wanted an answer to that ;)

Competition from new devices is, as you mention, likely to be a contributing factor. But how many shares have gone up recently? I wonder how they compare to the whole market?
Rob_B
Many reasons, although I don't expect you actually wanted an answer to that ;)

Competition from new devices is, as you mention, likely to be a contributing factor. But how many shares have gone up recently? I wonder how they compare to the whole market?

http://www.google.co.uk/finance?q=.inx
There ya go! :)
the S&P 500 is slightly down over the past 7 days
So many companies are really heavily cutting their investment in new infrastructure, that includes IT.

Traditionally the businesses have been the real profit centers for technology firms, with the exception of gaming graphics hardware. But even those guys are aiming for the businesses rather than just gamers now.
There is also a seasonal effect, the market drives the price up at the end of the tax year to make people pay more for less then it drops as new money/support falls away. Got to love it!