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PC Sales Jump Since Windows 7 Release

January 7th, 2010 Michael McDonough

According to Morgan Stanley and NPD, since the release of Windows 7 computer sales have risen by at least 30% y/y every week through  December 26th, the most recent data point (see chart from Morgan Stanley). Not only does this bode well for Microsoft (MSFT), but provides another reason to be bullish on Dell (DELL).  As I highlighted in a recent piece, Dell is poised to benefit from an approaching IT replacement cycle, and this recent sales data should add further fuel to the fire over the short-term.

Regarding the IT replacement cycle According to Morgan’s report, “MSFT noted in our meetings that the last material upgrade cycle was 2004/2005, and believes the combination of old machines and the pending XP end of support will be powerful drivers for an upgrade cycle, likely beginning in earnest in mid to late CY10.”  I remain bullish on Dell, and believe the company has considerable upside.

Computer Shipments

Note: I hold a long position in DELLI highly recommend you research any investment ideas presented in this piece for its suitability within your own portfolio.

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