PCs Rebound: Are Dinosaurs Rising in Tech?


This week saw surprising news for the technology sector. PCs are growing again.

Yesterday, two major research firms both announced that PC shipments rose in the second quarter for the first time in six years. IDC reported a gain of 2.7 percent year-over-year, crushing expectations for a 0.3 percent increase. Gartner weighed in with a positive 1.4 percent reading.

China’s Lenovo led the gains overall. Dell (DVMT) outstripped HP (HPQ) among the domestic players.

In case you forgot, PC stands for “personal computer.” It’s that rectangular thing that was on your desk before your firm migrated to the cloud. Back in the dark days of last century (when they had telegrams and vacuum tubes), PCs actually drove the tech sector.

Don’t feel too bad if the PC growth is a surprise, because ordinary consumers aren’t driving the trend. Instead it resulted from commercial orders, which matches the broader pattern of strong business investment in the U.S. That was the verdict from both IDC and Gartner.

Separately, last week’s non-farm payrolls report may have foreshadowed the news. Did you know that computer and electronics factories added 13,500 workers in June? That was the highest total since the same month in 2000.

In conclusion, just when you thought the tech sector couldn’t get any better, evidence suggests it just got better.

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David Russell is Global Head of Market Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.