Bill Peters
Earnings watch: HP and Dell will announce more details about the resumption of personal computer sales, while Salesforce and other cloud services companies will report this week.
Best Buy (BBY) chief executive Corey Barry said last week that the downtrend in demand for tech goods should hit bottom soon and pick up in the second half of the year. Executives at chipmaker Nvidia Inc. (NVDA) said the pandemic’s surge has finally dried up the bulk of its products that couldn’t find buyers.
These are excellent data points for the tech industry’s sluggish PC market, which has experienced a record drop since purchases surged early in the COVID-19 pandemic. We’ll get a clearer picture of where consumers of tech products are, and about the chips in laptops.The top discounted desktop product will report quarterly results on Tuesday. Manufacturer HP Inc. (HPQ) and Dell Technologies Inc. (DELL), which will report on Thursday.
These companies believe the tech industry’s massive move toward, or at least a lot about, artificial intelligence to keep investor enthusiasm after a wave of job cuts in post-pandemic declines in digital demand. It will be reported in the movement to talk about. FactSet senior earnings analyst John Butters said in a report on Friday that 110 S&P 500 companies mentioned the term “AI” in earnings calls between March 15 and May 25, at least He said it was the highest since 2010.
HP and Dell will also increase their ambitions in AI, but the more important question for them is whether they’ve cleared their inventory jams. Based on comments from others involved in the PC supply chain, the PC supply chain should be improving. Best Buy (BBY)’s Barry said the aftermath of the boom-bust cycle will soon fade.
“Based on the current situation, we continue to believe 2023 will be the bottom of the tech demand downturn,” Barry said.
“Looking ahead, I think we can see a turning point in the business in the second half of this year and into next year,” she added.
But for now, analysts at JP Morgan said last week that demand for Dell’s PCs is only “moderately improving.” He also noted that more cautious IT spending on technology infrastructure would put pressure on the company’s divisions focused on cloud and storage operations.
Cloud software names will also pop up a lot as concerns about slowing growth have been negated by strong performances and forecasts so far this season. Results from leading cloud services companies including Salesforce Inc. (CRM), Box Inc., (BOX) VMware Inc. (VMW), Veeva Systems Inc. (VEEV), and Zscaler Inc. (ZS) round out the week.
Wedbush analysts said in a research note on Thursday that the broader background for Salesforce isn’t exactly “roses and rainbows.” But they’re working on a workplace software company that owns the communications platform Slack and helps different departments in the workplace more easily track customer data. has been concluded,” he said.
Earnings this week
Nine S&P 500 companies are expected to report quarterly results next week, according to FactSet. One of them, Salesforce, is a member of the Dow Jones Industrial Average.
Among the companies slated to report include data storage provider Pure Storage Inc. (PSTG) and AI software provider C3.ai Inc. (AI). Performance expectations are also coming from outdoor and workwear maker Duluth Holdings (DLTH) and PVH Corporation (PVH), which owns clothing brands such as Tommy Hilfiger and Calvin Klein. I am careful about arranging items on the shelf. After a year of weak demand.
Calls to put on your calendar
Macy’s Results, Department Store Demand: Macy’s (M) will report first-quarter results on Thursday as rising prices of staples put pressure on consumers, leaving them with less room to buy clothing and home goods. is. But shares of other clothing retailers, including Gap (GPS) and Urban Outfitters (URBN), have risen recently as investors find positive earnings results. But beauty product chain Ulta Beauty Inc.’s (ULTA) shares took a hit after its own earnings, with executives slamming demand and pushing prices higher as the economy reopened from the pandemic. He warned that competitors were starting to lower the prices of their products.
Numbers to watch
Impact of Dollar General Sales and Inflation on Low-Income Consumers: Over the past two years, price increases have had a significant impact on low-income consumers. Low-income Americans are increasingly skipping meals as they deal with the end of pandemic-era government aid. Dollar General Corporation (DG)’s results, due to be released on Thursday, will reflect the impact and how wealthy customers are turning to 100-yen shops for cheaper supplies. It will be an indication of whether Walmart (WMT), a major discount chain, said last week it was seeing more high-income shoppers coming into its stores, but added that families were having a hard time with inflation now in its third year. .
-Bill Peters
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(Closed) Dow Jones Correspondence
05/29/23 1319ET
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