Morgan Stanley Sees PC Shipments Falling 28% in Q4 as Rising Prices Hit $HPQ and $DELL

HP ($HPQ) and Dell ($DELL) racked up a combined $62.7 billion in sales last quarter, but both sold fewer PCs as businesses and consumers put off purchases due to rising prices. HP said total units were down 16%, with consumer units down 19% and commercial units down 14%. HP revenue from PC sales rose due to higher prices, not higher unit volume.
Morgan Stanley analyst Erik Woodring estimates third-quarter global PC average selling prices rose to over $1,200, nearly 40% above early 2025 levels, and expects them to exceed $1,300 by mid-2027. He forecasts PC shipments to fall 28% year over year in Q4 and 11% in calendar 2027, about 7% worse than the Wall Street consensus. He estimates HP and Dell PC unit sales dropped 32% and 27%, respectively, in Q3. IDC data shows Q3 shipments down 21% from a year ago.
In a September SEC filing, HP said its preliminary planning assumption is that industry-wide PC unit volumes decline roughly mid-single-digits in percentage terms in calendar 2027. HP shares have fallen 16% from their September high.
Woodring named HP (41% downside) and Acer (25% downside) as his highest-conviction global PC OEM underweights, with a $19 price target on HP. He rates Dell equal weight with a $499 price target.