2 Stocks to Buy Right Now From the Prospering Computer Industry

The Zacks Computer – Micro Computers industry players like Dell Technologies DELL and One Stop Systems OSS are benefiting from steady demand for enterprise devices, including laptops, tablets and smartphones. The improving availability of 5G-enabled smartphones has been a key catalyst for industry participants. The launch of foldable and artificial intelligence (AI) and machine learning-infused smartphones, tablets, wearables, hearables and PCs is a major growth driver for industry participants. However, waning demand for consumer PCs is a headwind. Heightened geopolitical challenges post-U.S. President Donald Trump’s decision to levy tariffs on trade partners are expected to hurt industry participants. Weak demand in China has been a headwind.

Industry Description

The Zacks Computer – Micro Computers industry comprises companies that offer smartphones, desktops, laptops, printers, wearables and 3-D printers. Such devices are based on either iOS, MacOS, iPadOS, WatchOS, Microsoft Windows, or Google Chrome and Android operating systems. The companies predominantly use processors from Apple, Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better display, and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones. This has been well-supported by faster mobile processors. Laptops, both consumer and commercial, benefit from faster processors, sleek designs and expanded storage facilities. The addition of healthcare features has been driving the demand for wearables.

3 Micro Computer Industry Trends to Watch

Enterprise Adoption Remains Healthy: Strong enterprise demand has been benefiting the industry participants. The growing adoption of a hybrid working environment bodes well for the players, as demand for laptops and tablets is expected to increase. Demand for smart devices that offer facial recognition, retina scans or finger impressions to verify the user for biometrics is gaining traction as enterprises enhance security.

Impressive Form Factor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. This has been well-supported by faster mobile processors from Qualcomm, NVIDIA, Apple and Samsung. Improved Internet penetration and speed, along with the evolution of mobile apps, have made smartphones indispensable for consumers. Improved graphics quality is making smartphones suitable for playing sophisticated games. This is driving the demand for high-end smartphones and opening up significant opportunities for device makers.

AI-enabled PCs to Boost Demand: Personal computers (desktops and laptops), be they Windows or Apple’s MacOS-based ones, are expected to benefit from AI infusion. The addition of neural processing units (NPUs), which are dedicated units to manage AI-related tasks, in PCs is a driving demand for AI-enabled devices. AMD, Qualcomm and Intel offer NPU chips with OEMs such as ASUS, Acer, Lenovo, Microsoft, HP and others building these AI-enabled devices. Canalys expects AI-capable PC shipments to make up 50% of PC shipments in 2026. This offers significant growth opportunities for industry participants.

Zacks Industry Rank Indicates Bright Prospect

The Zacks Computer – Micro Computers industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #69, which places it in the top 28% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since June 30, the Zacks Consensus Estimate for this industry’s 2026 earnings has moved north by 9.5%.

Given the bright outlook, there are a number of stocks worth buying in the industry. But before we present those stocks, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry Lags Sector and S&P 500

The Zacks Computer – Micro Computers industry has underperformed the broader Zacks Computer and Technology sector, as well as the S&P 500, over the past year.

The industry has appreciated 14.3% over this period compared with the S&P 500’s return of 18.3% and the broader sector’s appreciation of 30.1%.

One-Year Price Performance

Industry's Current Valuation

On the basis of forward 12-month P/E, which is a commonly used multiple for valuing computer stocks, we see that the industry is currently trading at 27.47X compared with the S&P 500’s 21.05X and the sector’s 23.41X.

Over the last five years, the industry has traded as high as 32.01X and as low as 19.73X, with the median being 25.96X, as the chart below shows.

Forward 12-Month Price-to-Earnings (P/E) Ratio

2 Computer Stocks to Buy Right Now

Dell Technologies: This Zacks Rank #2 (Buy) company is benefiting from strong demand for AI servers, driven by ongoing digital transformation and heightened interest in generative AI applications. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In fiscal 2026, Dell Technologies won $64.1 billion in AI orders, shipped $25.2 billion and exited with a record $43 billion in AI backlog. DELL’s customer base surpassed 4,000 with growth across neoclouds, sovereigns and enterprise customers, which indicates that demand is broadening across all customer types. The growing demand for AI-enabled PCs is contributing to its Client Solutions Group’s revenue growth.

The Zacks Consensus Estimate for fiscal 2026 earnings has increased 12.5% to $12.71 per share over the past 30 days. The stock has appreciated 40.5% year to date.

Price and Consensus: DELL

One Stop Systems: This Zacks Rank #2 company offers specialized enterprise-class high-performance compute, high-speed switch fabrics and storage hardware and software. These are designed to target edge applications for AI and machine learning, sensor processing, sensor fusion and autonomy..

One Stop’s product pipeline is expanding across leading defense organizations and advanced commercial enterprises. The company is investing in next-generation product development and advancing new program opportunities that are expected to contribute to positive bookings growth in 2026 and 2027. Increase exposure on the P-8 Poseidon Reconnaissance aircraft program bodes well for OSS.

The Zacks Consensus Estimate for 2026 earnings has been steady at break-even over the past 30 days. The stock has appreciated 25.9% year to date.

Price and Consensus: OSS

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Dell Technologies Inc. (DELL): Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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