Huh..
From Barron's, November 2:
AI Is About to Remake the PC. These 2 Stocks Could Be Big Winners.
As sales of personal computers soared during the pandemic, you could almost hear PC makers saying, “We told you so.”
For years, laptops and desktops had remained technology’s workhorse, even with most of the industry’s attention moving to smartphones and the cloud. With everyone stuck at home in 2020 and 2021, global PC sales surged nearly 25%.
Then offices reopened and the upgrade cycle came to an abrupt halt. By 2022, PC sales were falling once again. This time, PC makers like Dell Technologies (ticker: DELL), HP Inc. (HPQ), and Lenovo Group (LNVGY) are taking a different approach to rev up sales: The PC business is going all in on artificial intelligence.
“The killer app of AI,” says Dell Vice Chairman Jeff Clarke, “will be that you’ll love your PC again.”
The working theory of AI has been that it requires big, powerful computers, driven by hard-to-find graphics processors, primarily from Nvidia (NVDA). All of that computing—the creation of large-language models plus their continuing use—happens in the cloud. Meanwhile, laptops, desktop PCs, and even mobile phones become simply access points to the cloud, where AI services like ChatGPT do their computationally intensive magic.
Even before AI, consumer and business laptops had largely become dumb terminals for using online platforms from Amazon.com (AMZN), Microsoft (MSFT), Alphabet ‘s (GOOGL) Google, Meta Platforms (META), and Apple (AAPL). Documents are in the cloud, email is in the cloud, photos are in the cloud, music is in the cloud. “The network is the computer,” Sun Microsystems computer scientist John Gage presciently said 40 years ago.
PC makers are looking to change that paradigm. They are readying AI personal computers, with the first models set to arrive in the next few months. The microprocessor companies are excited, too. The common goal is to enable PC users to run generative AI applications right on their desktops, whether connected to the network or not.
“We look at it as an opportunity to make the PC an uber-companion for how people get things done,” says Sam Burd, president of Dell’s Client Solutions Group, which includes its PC business. “They are going to be better, more productive devices for both corporate environments and for people at home.”
Alex Cho, president of HP’s Personal Systems Group, goes further: “It will be a real inflection point for the category. There will be dramatically new use cases, benefits, and experiences.”
Intel has talked extensively about the opportunity in AI PCs; the company will launch a chip code-named Meteor Lake, its first processor with an integrated neural processing unit, this December.
Advanced Micro Devices (AMD) CEO Lisa Su has been promoting AI at least since her January keynote address at CES , the giant annual tech trade show in Las Vegas, where she launched a new generation of processors with built-in AI capabilities. Qualcomm (QCOM), which licenses chip designs from newly public Arm Holdings (ARM), is ramping up its push into the PC processor market, with the potential to steal away market share from the market leaders. The company detailed its plans for AI PCs at its recent developers conference.
As consumers and businesses have learned in the 11 months since the launch of ChatGPT, generative AI allows once-unimaginable tools for the creation of text, images, video, and music. For businesses, the technology offers more intuitive and powerful ways to use corporate data to better serve customers and improve productivity.
It’s no surprise why the PC makers want in on the action: Research firm IDC recently forecast that enterprise AI spending would reach $143 billion by 2027, with a compound annual growth rate of more than 73%.
That’s a huge opportunity for a PC industry that hasn’t shown sustained growth for years.
The pandemic-era work-from-home trend triggered a big but ultimately misleading surge in PC demand. Global shipments reached 342 million in 2021, a 23% spike from prepandemic days, according to Gartner data. PC shipments were 279 million in 2019.....
....MUCH MORE
If this article hadn't been written by Eric Savitz, someone who knows tech and knows how to sniff out the action, I would have started giggling. But he's serious and I'm open to ideas that don't originate with moi.
We are fanbois.
