AI PC Forecast Underscores Opportunity for This Holding

*Micron’s earnings will bring new color on the PC, smartphone and data center markets

*Canalysis sees AI PC shipments exploding to nearly half of all PC shipments in the next two years

*As HP and others bring more AI PC models to market, the market will factor that into Qualcomm’s shares

Ahead of Micron’s MU quarterly results on Wednesday night, which will give us additional color on the PC, smartphone and data center end market, Canalysis shared its findings that the U.S. PC market rose 4.9% year over year in 2Q 2024 to 18.9 million units.

Sequentially, that translates into a more than 27% increase. The firm also lifted its U.S. PC market forecast with shipments now expected to rise 6% in 2024 to just under 70 million units before rising to 74 million units next year. Parsing those figures, Canalysis’s 2024 forecast implies U.S. PC shipments will jump almost 8% in 2H 2024 compared to 1H 2024.

Helping drive that is the accelerating adoption of AI PCs, which Canalysis sees hitting 25% of U.S. PC shipments in the current quarter, rising further to 30% in the December quarter. Adoption is expected to continue over the ensuing quarters, with AI PCs hitting 47% of U.S. PC shipments by 4Q 2025. While those figures are for the U.S. market, Canalysis still sees that 48 million AI PCs will ship this year, with more than 100 million shipping next year. By 2026, AI PCs are expected to account for more than half of all PC shipments across the globe. It’s that opportunity that we continue to own Qualcomm QCOM shares.

As we get ready for Micron’s comments and the color it will bring for several of our holdings, HP HPQ showed a new selection of AI computers at its "Imagine" conference in Palo Alto, California this week. The first new AI PC HP is launching is the OmniBook Ultra Flip, a consumer-level AI PC. The OmniBook Ultra Flip is the company’s first next-gen AI PC two-in-one laptop with a convertible design so it can be used as a traditional laptop or folded back, like a tablet.

HP is also expected to announce further AI models later this year. As these new models roll out with others from Lenovo, Dell DELL, Asus, Acer and other firms, and Apple’s AAPL rolls out more Apple Intelligence features for the Mac, we should see the AI PC opportunity become more of a factor in how the market views QCOM shares.

Between now and then, should QCOM shares drift lower near $160, we’d be inclined to pick up some additional shares for the Portfolio.

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At the time of publication, TheStreet Pro Portfolio was long QCOM and AAPL.