This is why Dell and HP Are Hot Again

The pandemic forced company staff to work from home, driving the need for PC and laptop upgrades. Previously, smartphone innovation was so fast-paced that sales outpaced computer demand for years. Today, the big brand names like HP (NYSE:HPQ) and Dell (NYSE:DELL) are poised to reward investors. As the pandemic continues through the fall season, computer sales will increase.

In the third quarter, HP posted personal systems revenue rising 7% Y/Y to $10.4 billion. Consumers drove sales 42% higher. As expected, printing net revenue fell 20% Y/Y. Work-from-home lowered printing needs. While HP sold 11% more computer units, desktop sales fell 30%, while notebook sales grew 32%. Looking ahead, HP forecast free cash flow in the range of $2.5 billion to $3.0 billion.

HPQ stock is one of the most under-valued tech stocks on the market.

In its Q2, Dell posted sales at its virtualization unit, VMware, rising 10% to $2.9 billion. Recurring revenue rose 15% to $6 billion. Dell generated $3.3 billion in cash from operating activities. With $12.3 billion in cash on hand, it paid down $3.6 billion in debt.

Dell’s Infrastructure Solutions Group is a bright spot. Revenue topped $8.2 billion. The cloud and networking demand will only increase, suggesting that Dell stock will continue its uptrend.