The shares of each company dropped in premarket trading.
Revenue generated by Dell’s PC business declined 1% to US$12.1 billion in the fiscal third quarter, falling short of estimates.
While sales in HP’s PC unit rose 2% to US$9.59 billion in a similar three-month period, that too missed the average analyst estimate.
“The PC refresh cycle is pushing into next year,” Dell CFO Yvonne McGill said today on a call with analysts after the results.
HP CEO Enrique Lores said in an interview that the release of Microsoft Corp’s new edition of Windows software hasn’t fueled PC sales from corporate clients as quickly as in previous releases.
The market had seen a historic decline in recent years after a burst of demand for new laptops in the early months of the pandemic when students and corporate employees were stuck at home.
While signs of a rebound began to materialise this year, shipments again dipped in the third quarter, industry analyst IDC said in October.
PC makers had hoped that new machines touted as better for artificial intelligence (AI) workloads would spur demand.
“But “buyers have yet to see clear benefits or business value,” Mikako Kitagawa, an analyst at Gartner Inc said in report last month.
Dell shares fell about 13% in premarket trading today after closing at US$141.74 in New York.
The stock had gained 85% this year through yesterday’s close.
HP shares declined about 10% after closing at US$39.10. HP stock had increased 30% this year.
Dell is best known for its computer business, but the Round Rock, Texas-based company has enjoyed a renaissance of investor interest due to its high-powered servers for AI workloads.
Earlier this month, Dell announced it was shipping servers with Nvidia Corp’s new Blackwell semiconductors to cloud infrastructure provider CoreWeave.
Sales in Dell’s infrastructure unit including servers rose 34% to US$11.4 billion in the period ended Nov 1, the company said in a statement.
That’s just ahead of the US$11.3 billion anticipated by analysts.
Total revenue increased 10% to US$24.4 billion, missing the average analyst estimate of US$24.6 billion, according to data compiled by Bloomberg.
“The company shipped US$2.9 billion in AI-optimised servers in the quarter,” executives said.
The metric was a step down from the US$3.1 billion reported in the preceding period.
“AI is a robust opportunity for us with no signs of slowing down,” Dell COO Jeff Clarke said in the statement.
He touted orders of AI servers in the quarter hitting US$3.6 billion and growth “across all customer types”.
For the quarter ending in February, Dell gave a revenue outlook of about US$24.5 billion.
Analysts, on average, projected US$25.4 billion. Adjusted earnings will be US$2.40 a share to US$2.60, compared with the average estimate of US$2.66.
HP’s outlook also failed to impress.
Earnings, excluding some items, will be 70 cents to 76 cents a share in the period ending in January, the Palo Alto, California-based company said. Analysts, on average, projected 86 cents.
“Weaker-than-expected Personal Systems sales and profit were the biggest drag on HP’s fiscal Q4 results, and its below-consensus Q1 EPS guidance suggests little improvement in PC demand in the seasonally stronger December quarter,” Woo Jin Ho, an analyst at Bloomberg Intelligence, said in a note after the results.