In this article, we discuss 10 best computer hardware stocks to buy now. If you want to see more stocks in this selection, check out 5 Best Computer Hardware Stocks To Buy Now.
According to The Business Research Company's "Computer Hardware Global Market Report 2022," the size of the computer hardware market increased from $1,129.39 billion in 2021 to $1,235.28 billion in 2022, with a compound annual growth rate (CAGR) of 9.4%. It is projected that the computer hardware market will reach $1,517.99 billion in 2026, growing at a CAGR of 5.3%. In 2022, North America held the position of the largest region in the computer hardware market, while Asia-Pacific ranked as the second largest region in terms of market size. The computer hardware market encompasses the sale of computer hardware and associated services, including a wide range of products such as personal computers (PCs), laptops, tablets, computer storage devices, peripheral equipment, servers, and processors.
In recent years, the IT hardware industry has experienced significant technological advancements, particularly in areas like graphics processing and virtual reality. Looking ahead, virtual reality is set to become more accessible and successful in the mainstream computer hardware market, as many of its challenges are being addressed and improved, according to TechNavio. The firm observed that a notable obstacle in the PC gaming peripherals market has been the high cost associated with virtual reality. Until now, VR headsets have been prohibitively expensive, and the additional expense of the necessary PC hardware to support them has compounded the issue.
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On January 11, Reuters cited research firms IDC and Canalys, which predicted that global shipments of personal computers are anticipated to increase from late 2023 onwards. The growth is expected to be accelerated by a new cycle of system upgrades, which were previously delayed by customers due to concerns about inflation and recession. However, these delayed upgrades are likely to occur later in the year and act as a catalyst for the growth of the PC market, as stated by the research firms. Canalys analyst Ishan Dutt further suggested that the recovery will be supported by a surge in demand from the education sector in major markets, as the devices deployed during the peak of the pandemic reach the end of their life cycle.
We scanned Insider Monkey’s database of 943 hedge funds and picked the top 10 companies that operate in the computer hardware sector with the highest number of hedge fund investors. These are the best computer hardware stocks to buy according to hedge funds.
Best Computer Hardware Stocks to Buy Now
10. Western Digital Corporation (NASDAQ:WDC)
Number of Hedge Fund Holders: 31
Western Digital Corporation (NASDAQ:WDC) develops, manufactures, and sells data storage devices and solutions. The company operates in different regions including the United States, China, Hong Kong, Europe, the Middle East, Africa, Asia, and other international markets. Their product range includes hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook computers, gaming consoles, smart video systems, and set-top boxes.
On March 1, Raymond James analyst Srini Pajjuri initiated coverage of Western Digital Corporation (NASDAQ:WDC) with an Outperform rating and a $46 price target. The stock has experienced a surge in value due to optimistic expectations of a market rebound and rumors about the possible separation or sale of Western Digital's NAND business. The analyst believes that even without these factors, Western Digital Corporation (NASDAQ:WDC)’s valuation is still attractive, indicating potential for continued outperformance based on cyclical recovery alone. Furthermore, if a separation does occur, it could unlock an additional 30% upside for the stock, as suggested by the firm.
According to Insider Monkey’s fourth quarter database, 31 hedge funds were long Western Digital Corporation (NASDAQ:WDC), compared to 46 funds in the prior quarter. Andrew Wellington and Jeff Keswin’s Lyrical Asset Management is the biggest stakeholder of the company, with 3.4 million shares worth $111.4 million.
Like Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC), and NVIDIA Corporation (NASDAQ:NVDA), Western Digital Corporation (NASDAQ:WDC) is one of the best computer hardware stocks to invest in.
ClearBridge Multi Cap Growth Strategy made the following comment about Western Digital Corporation (NASDAQ:WDC) in its Q4 2022 investor letter:
“Beyond the sale of ImmunoGen, our transactions were relatively limited in the fourth quarter. We cut our cyclical technology exposure with a trim to hard disk drive maker Western Digital Corporation (NASDAQ:WDC), which has higher than average financial leverage for our portfolio and is facing a challenging demand environment.”
9. NetApp, Inc. (NASDAQ:NTAP)
Number of Hedge Fund Holders: 32
NetApp, Inc. (NASDAQ:NTAP) is a global provider of services that focus on managing and sharing data through cloud-based solutions. The company offers a range of intelligent data management software, in addition to providing storage infrastructure solutions such as the NetApp All-Flash FAS series, NetApp Fabric Attached Storage, NetApp FlexPod, NetApp E/EF series, NetApp StorageGRID, and NetApp SolidFire. These services cater to on-premises data management, as well as private and public cloud environments.
As per BofA analyst Wamsi Mohan, there has been a downgrade of NetApp, Inc. (NASDAQ:NTAP)’s rating from Neutral to Underperform along with a lowered price target of $58 from $70. The firm anticipates that NetApp will face difficulties in achieving product revenue growth in FY24 due to a weaker demand environment.
According to Insider Monkey’s fourth quarter database, 32 hedge funds were bullish on NetApp, Inc. (NASDAQ:NTAP), compared to 36 funds in the prior quarter. Steve Cohen’s Point72 Asset Management is the biggest stakeholder of the company, with 2.8 million shares worth approximately $173 million.
“Technology remains important in our portfolios, although the sector weights have come down over the past year. We now hold NetApp (NTAP) of which has a strong growth prospects, yet attractive valuations in our view. Unlike many younger tech companies, we believe our holdings should significantly benefit from an upturn in the economy.”
8. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 34
Super Micro Computer, Inc. (NASDAQ:SMCI) specialize in the development and production of advanced server and storage solutions. These solutions are designed with high performance in mind and are based on modular and open architecture. Super Micro Computer operates not only in the United States but also in Europe, Asia, and other parts of the world, catering to a global customer base.
On March 21, Super Micro Computer, Inc. (NASDAQ:SMCI) announced the commencement of shipments for their latest servers, which incorporate Nvidia's HGX H100 8-GPU systems. These servers are specifically designed for applications in AI training, high-performance computing, deep learning, and other advanced computing systems.
According to Insider Monkey’s fourth quarter database, 34 hedge funds were bullish on Super Micro Computer, Inc. (NASDAQ:SMCI), compared to 27 funds in the prior quarter. David Brown’s Hawk Ridge Management is the biggest stakeholder of the company, with 1.13 million shares worth $92.8 million.
7. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 38
HP Inc. (NYSE:HPQ) is a global company that offers a range of products, technologies, solutions, and services in the field of personal computing and access devices. It is one of the best computer hardware stocks to invest in. The company reiterated its full-year earnings and free cash flow outlook despite weak first quarter results.
On April 17, JPMorgan analyst Samik Chatterjee upgraded HP Inc. (NYSE:HPQ) to Overweight from Neutral with a price target of $35, up from $30. The analyst's decision is supported by recent data points regarding PC shipments, which align with the firm's belief in a recovery in the second half of 2023.
According to Insider Monkey’s fourth quarter database, 38 hedge funds were bullish on HP Inc. (NYSE:HPQ), compared to 42 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company, with 104.5 million shares worth $2.80 billion.
6. Pure Storage, Inc. (NYSE:PSTG)
Number of Hedge Fund Holders: 39
Pure Storage, Inc. (NYSE:PSTG) offers a range of data storage technologies, products, and services on a global scale. The company specializes in the development of hardware and software products specifically designed for all-flash data storage. In the fourth quarter of the fiscal year 2023, the company repurchased approximately 2.4 million shares, resulting in a return of approximately $67.5 million to its stockholders. Throughout the entire fiscal year 2023, Pure Storage, Inc. (NYSE:PSTG) repurchased about 7.8 million shares, which amounted to a return of approximately $219.0 million to its stockholders. Additionally, the company has been authorized to further repurchase shares worth up to an additional $250 million under its stock repurchase program.
On April 6, Wedbush analyst Matt Bryson upgraded Pure Storage, Inc. (NYSE:PSTG) to Outperform from Neutral with a $34 price target. According to the analyst, the company still provides top-notch products, as evident from its profit margins. Wedbush also believes that the management's guidance significantly reduces the risks associated with potential economic downturns, as Pure Storage, Inc. (NYSE:PSTG)’s outlook anticipates a decrease in growth rates below historical trends. This adjustment may help rectify the recent over performance. Additionally, Wedbush pointed out that the current valuations of Pure Storage, Inc. (NYSE:PSTG) are appealing when compared to historical standards.
According to Insider Monkey’s fourth quarter database, 39 hedge funds were bullish on Pure Storage, Inc. (NYSE:PSTG), compared to 35 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the biggest stakeholder of the company, with 5 million shares worth $136.8 million.
In addition to Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC), and NVIDIA Corporation (NASDAQ:NVDA), elite investors are piling into Pure Storage, Inc. (NYSE:PSTG) for exposure to the computer hardware market.
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Disclosure: None. 10 Best Computer Hardware Stocks To Buy Now is originally published on Insider Monkey.