Best Buy stock surges 20% on potential of AI-infused devices, despite PC market struggles.

From Nasdaq: 2024-06-19 05:30:00

Consumer electronics retailer Best Buy is struggling post-pandemic with a downturn in the PC market, leading to a 6.1% drop in comparable sales in Q1 2025. PC shipment volumes globally fell by 16.5% in 2022 and 13.9% in 2023, hurting Best Buy’s performance. The company expects a small sales decline this year.

Best Buy stock has shown signs of recovery post-earnings report, rising over 20% recently. The surge is attributed to the potential of AI-infused devices boosting demand and prices. Windows PCs featuring AI capabilities are set to compete with Apple’s high-performance laptops. Microsoft and AMD are launching AI-integrated processor laptops this summer.

Systems powered by Intel’s upcoming Lunar Lake chips are expected to hit the market after AMD’s launch. Microsoft is introducing new AI features for Windows, aiming to reignite consumer interest in PCs. Best Buy, despite facing challenges, remains profitable, with a reasonable valuation of around 15 times the average analyst estimate.

Investors considering Best Buy should note that it did not make the Motley Fool’s 10 best stocks list. The list offers potential for high returns, similar to Nvidia’s performance post-recommendation in 2005. Stock Advisor provides a strategic investment blueprint, outperforming the S&P 500 since 2002. Disclosure: The author holds positions in Intel, and The Motley Fool recommends several tech companies.



Read more at Nasdaq: Best Buy Stock Is Surging on AI Hype. Is It Time to Buy?