(Reuters) – Computer makers Dell and HP Inc fell on the stock market on Wednesday after publishing forecasts that cast doubt on hopes of a recovery in PC demand with the rise of artificial intelligence (AI) .

On Wall Street, around 3:50 p.m. GMT, Dell fell by 12.74% after having erased around $11 billion in market capitalization in early trading following the publication Tuesday evening of quarterly revenue lower than estimates.

Its competitor HP Inc also plunged around 12%, its market capitalization having fallen by almost two billion dollars in early trading following a quarterly profit forecast below analysts’ expectations.

In their wake, Microsoft fell 0.92% and the new technologies sector on the S&P 500 lost 1.65%.

Demand for traditional PCs, which benefited from lockdowns during the COVID-19 pandemic, has returned to normal, while AI-powered computers have yet to see mass adoption despite some interest from businesses and the education sector.

“We have long warned that we do not expect personal computers equipped with artificial intelligence technologies to lead to a structural change in PC demand, and we believe that this may be what has disappointed the market,” explains Eric Compton, analyst at Morningstar.

Microsoft’s planned PC upgrade cycle to end support for Windows 10 in favor of Windows 11 has been slower than expected.

“As the Windows 11 refresh has progressed more slowly than previous industry transitions, we expect the impact of the upgrade to be more pronounced in 2025,” noted HP Inc Chief Executive Officer Enrique Lores .

For Dell, the AI-based server activity continues to be a positive point, with revenues from the group’s servers and networks division having jumped 58% thanks in particular to demand from “cloud” (cloud computing) companies. who are looking to take advantage of AI.

At least three analysts raised their forecasts for Dell and HP, while one intermediary reduced share price targets for both groups.

Some analysts, however, have warned that the slow rollout of Nvidia’s next-generation AI chip could weigh on Dell’s sales and hit its profit.

A design flaw in Nvidia’s Blackwell chips and limited advanced semiconductor production capacity at TSMC are affecting the deployment of these processors.

“The transition to Blackwell could impact Dell’s time to return on investment. We are concerned that these Blackwell systems will again weigh on gross margin,” Barclays analysts write in a note.

HP stock currently trades at 10.84 times analysts’ estimated earnings, compared to Dell’s 15.51 and Microsoft’s 30.94.

(Reporting by Akash Sriram and Arsheeya Bajwa in Bangalore; by Claude Chendjou, edited by Blandine Hénault)

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