AI-Powered PCs Are Reshaping the Market—And Dell is Well-Positioned in This PC Market Evolution

The personal computer market is undergoing a significant transformation, driven by the surge in AI-enabled devices and extended refresh cycles. Dell Technologies stands to benefit substantially from these trends, though it operates in an increasingly competitive landscape where established players like HP and Apple are also gaining ground.

The PC Market’s AI Momentum and Upgrade Opportunity

Dell’s Client Solutions Group (CSG) is experiencing renewed momentum. In Q3 fiscal 2026, CSG revenues reached $12.47 billion, up 3% year-over-year. More notably, the commercial segment achieved its fifth consecutive quarter of growth, climbing 5% to $10.6 billion, while consumer revenue returned to positive territory for the first time in three years—a sign of market stabilization.

The PC market upgrade cycle remains a powerful tailwind. Approximately 500 million devices compatible with Windows 11 have yet to be upgraded, while another 500 million older machines in active use cannot support Windows 11 at all. This represents an enormous addressable opportunity for hardware manufacturers seeking market share gains.

AI-enabled PCs are accelerating this replacement demand. Modern AI PCs integrate neural processing units (NPUs) to run sophisticated applications and on-device language models, offering superior performance and efficiency compared to traditional processors. As enterprises and individual users demand more capable computing solutions, Dell is capitalizing on this shift by expanding its AI PC portfolio.

Intensifying Competition in the AI PC Segment

The competitive landscape is heating up. HP has demonstrated particularly strong execution, with AI PCs representing over 30% of its total shipments in Q4 fiscal 2025—surpassing internal expectations by a quarter. These devices command 5-10% price premiums over conventional PCs, meaningfully improving HP’s revenue mix and margin profiles.

Apple, meanwhile, continues to capture share in the premium segment. Mac sales climbed 12.7% year-over-year in Q4 fiscal 2025 to $8.5 billion, representing 8.5% of total company revenue. The introduction of M5-powered MacBook Pro models and new iPad Pro variants further strengthens Apple’s position in the high-performance PC market.

Valuation and Growth Outlook

Dell’s stock has gained 22.1% over the past six months, trailing the broader Computer & Technology sector’s 26.2% advance and the Computer - Micro Computers industry’s 36.5% surge. However, the valuation presents relative value: Dell trades at a forward 12-month Price/Sales of 0.75X versus the sector average of 6.79X, earning a Value Score of A.

Analyst consensus pegs fiscal 2026 earnings at $9.89 per share, up 3.6% in the past month and implying 21.5% year-over-year growth. While Dell expects overall PC market unit shipments to remain essentially flat year-over-year, the company anticipates meaningful expansion in the AI PC category and sustained benefits from the Windows 11 transition cycle.

The PC market is far from static—it’s being redefined by AI capabilities and replacement demand. Dell’s execution in this shifting landscape, combined with its attractive valuation, positions it as a noteworthy player to monitor as the PC market evolution continues.