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Remote Working Boosts Peripherals, PC Sales: 4 Stocks to Buy

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On May 28, Dell Technologies, Inc. (DELL - Free Report) said revenues from client solutions group, which accounts for half of total revenues and includes desktop PCs, notebooks and tablets, rose 2% to $11.1 billion in its fiscal first quarter. The company said that demand for its workstations increased as more companies are moving their employees to work from home due to the coronavirus pandemic.

If health experts are to be believed, the situation isn’t going to change anytime soon. Work and learn from home has become the new normal, spurring demand for computer hardware, peripherals, network software and cloud business surging.

Dell Sales Jump

Although Dell’s revenues fell marginally to $21.90 billion in the fiscal first quarter, the company said that demand for its PCs, notebooks and tablets grew as more people worked and learnt from home. Also sales from its software unit VMware jumped 12% to $2.76 billion.

Commercial notebooks reported double-digit unit and revenue growth, while mobile workstations posted high-single-digit revenue growth, the company said. Dell recently also launched a range of PCs across its popular Latitude and Precision lines aimed at helping employees work efficiently and securely from anywhere.

Remote Working Boosting Demand for Hardware, Network Software

Demand for video collaboration products has surged over the past three months as schools and offices are shut in a bid to prevent the spread of coronavirus. This has seenlocked-down staff relying on video conferencing equipment, software and webcams. Dell isn’t the only company to have reported a surge in demand for PCs, notebooks and tablets. Earlier this month, Logitech International SA (LOGI - Free Report) reported a big jump in sales of computer products during its fiscal fourth quarter as more people worked from home and families turned to technology to keep in touch during the coronavirus crisis.

According to latest data from The NPD Group, PC sales in the first quarter increased 16% to $2.4 billion compared to the same period a year ago. Storage and data protection software sales grew 12.5%, while security software sales grew 5.3%, representing nearly a quarter of the sales in the software market during this time.

Our Choices

The at-home culture is here to stay for a longer time than expected with no signs of the pandemic easing. Demand of computer hardware and network software will only grow in such a situation, helping these four stocks to gain.

Logitech International is a global leader in peripherals for personal computers and other digital platforms, which develops and markets innovative products in PC navigation, Internet communications, digital music, home-entertainment control, video security, interactive gaming and wireless devices.

The company’s expected earnings growth rate for the current year is 5.1%. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the past 30 days. Logitech sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Mercury Systems Inc (MRCY - Free Report) produces hardware products, including components, such as power amplifiers and limiters, switches, oscillators, filters, equalizers, converters, chips, integrated circuits, and memory and storage devices.

The company’s expected earnings growth rate for the current year is 17.4%. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the past 30 days. Mercury Systems carries a Zacks Rank #2 (Buy).

Microsoft Corporation (MSFT - Free Report) is one of the largest broad-based technology providers in the world. The company dominates the PC software market with more than 80% of the market share for operating systems. 

The company’s expected earnings growth rate for the current year is 19.8%. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the past 30 days. Microsoft carries a Zacks Rank #2.

Apple, Inc. (AAPL - Free Report) designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories worldwide. Its signature products include iPhone, Mac and iPad.

The company’s expected earnings growth rate for the current year is 3.5%. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the past 30 days.  Apple has a Zacks Rank #2.

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