Things You Can Invest In: PC Edition

Bill Gates, father of modern PCs

When was the last time you bought a computer?

If you’re a developer, a gamer, or you run a business, chances are you bought a PC sometime in the last year or two. If you’re an average Joe, however, you’re probably a bit more reluctant to upgrade your working laptop and focus more on your phone or tablet.

This mindset is unfortunately cutting into the bottom line of major computer manufacturers. Top companies in the computing industry are laying off thousands each year as they struggle to figure out how to sell more computers. Some are even selling their computer divisions wholesale and closing up shop.

There’s still hope for computer companies, however. People still need to buy computers for home and work, and you can’t do everything from a mobile device. Leading computer companies are also trying to figure out how to sell other related or unrelated products, diversifying their businesses to move where consumer demand is greatest.

If you have faith in the future of non-Apple computers and the computing business, you can actually invest in them. Aside from Dell, who famously went from public to private in 2013, the world’s top PC manufacturers are all publicly traded companies.

But should you invest in these companies or something else instead? Let’s take a look.

Lenovo is currently the top PC manufacturer in the world.

The company famously purchased Motorola from Google, as well as the ThinkPad business from IBM. The ThinkPad devices are widely used in the business/enterprise sector. The Chinese company trades on the Hong Kong Stock Exchange and Over-The-Counter (or penny stock) exchanges in America. Unfortunately, they haven’t fared particularly well on the market as of recent, and their stock declined by nearly 30% in the last year.

HP also has a sizable part of the world’s PC market share.

HP ($HPQ) trades on the New York Stock Exchange. Though the stock grew by over 38% in the last year, HP’s computer division has been giving them trouble. They’ve laid off a significant chunk of their workforce while they struggle to figure out how to diversify their business past computers.

Instead of investing in computer companies themselves, consider investing in component makers instead.

Computer manufacturers are having a tough time, as fewer people are buying computers. (You have mobile phones to thank for that.) Components manufacturers, however, are doing really well. Intel ($INTC) the world’s leading PC chipmaker, started branching out into other things, like self-driving car technology and modems for mobile phones. In the last year, their stock increased by over 16%, and investors have a lot of faith in the company’s future.

Computer storage manufacturers like Western Digital ($WDC) and Seagate ($STX) are also booming. Both stocks have increased greatly over the last several years, as server farms and all sorts of computing devices still require solid state and physical hard drives.

Computer manufacturers struggle to revitalize their businesses. Components manufacturers, however, are doing everything and anything they can to get their products into any compatible device. If you believe Lenovo, HP, and the like will turn their computer businesses around, then be sure to research their financial statements and forward-looking plans carefully before investing.

If you want to invest in where the industry is going, however, you might want to take a closer look at chipmakers, hard drive makers, and the like. Their products will be going in all sorts of technology, from mobile phones to VR devices, and demand for their goods will only increase over time.