Goldman Sachs: Apple gained share last quarter, Dell lost

From a note to clients by analyst Rod Hall that landed on my desktop Sunday:

Q3 PC units rose 18% Y/Y due to what we see as continued demand pull-forward driven by work-from-home and online learning. We note FY’20 is the second successive year of notable PC unit growth in a replacement driven market where we see long term trends as flattish at best.

While near-term demand indications are strong, we continue to be cautious on PC demand looking into FY’21 as COVID driven replacement acceleration begins to wane and comps get more difficult. We also note the large shift in disposable income away from travel and out-of-home leisure activities toward home oriented spending during COVID. We believe that this shift is likely to move in the other direction as vaccine deployment drives re-opening in 2021 and that this shift is likely, in turn, to put incremental pressure on PC demand by the middle of next year...

Apple gained share with revenue rising 50% Y/Y while Dell lost share with revenue rising just 1% Y/Y. Lenovo reclaimed it’s No.1 position even though its Q3 revenue rose only 8% Y/Y while HP lost share with revenue growth of 9% Y/Y. In consumer PCs we believe the large performance upgrade that Macs equipped with Apple’s proprietary M1 SoC enjoy should continue to drive share gains for Apple.

Maintains Sell rating and deep underwater $75 price target. 

My take: Take the research, ignore the call.


  1. Bart Yee said:
    Hall clearly believes despite improvements for Mac sales in this and successive quarters, it won’t be good enough, along with greater Wearables and Services revenue, to offset eventual iPhone fatigue once this pandemic driven demand spike is over in 1-2 years. And he will be wrong on all of that.

    He may believe comps will be difficult once this and next quarters’ strong numbers are revealed. This is likely true and Apple won’t care because their roadmap of products and services innovation and business execution will justify AAPL’s expanded multiple over just a “hardware” company.

    The only way, IMO, the $75 price target is hit is with black swan events like calls for major tech break-ups (even then Shareholders would get unlocked values) or when Apple declares another 4:1 split at $300, but it won’t because Apple will wait till $450-500 share price is reached.

    December 21, 2020
  2. Gregg Thurman said:
    Lots of things going on right now. Hall has joined others in forecasting Mac share gains attributable to the M1. I concur and see that growth continuing for a very long time.

    I am going to sit out this week’s investment cycle as it seems that AAPL is in sell off cycle. No point in fighting it.

    December 21, 2020
  3. Jerry Doyle said:
    Never thought that I would be agreeing with Rod Hall in some form or fashion.

    Apple’s large performance upgrade to its Macs equipped with its proprietary M1 SoC will drive consumer PCs share gains for Apple throughout 2021 and into 2022. The COVID-19 era is inducing a behavioral change among the populous and the way we socialize and do work evolving more around the home. I believe that the PC era is getting renewed vitality and that Apple will benefit from this renewed stamina and grow its Mac line-up going forward.

    Apple’s IB is growing and more folk will move to Apple’s Macs during this behavioral change. We’re going to see increased revenue from Apple’s new Mac line-up going forward.

    December 21, 2020
  4. David Emery said:
    About the only Black Swan event I could think of that would send AAPL down to $75 would be the San Andreas Fault leveling the Apple compound. And I’m presuming that won’t happen because of earthquake building codes….

    December 21, 2020
  5. Steven Philips said:
    Earthquake building codes won’t help if half of California slides into the ocean! 🙂

    December 21, 2020

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