Dell Technologies and HP reported quarterly financial results that suggest a long-awaited recovery of the personal computer market is stalling. The shares of each company dropped in premarket trading.

Revenue generated by Dell's PC business declined 1pc to $12.1bn (€11.5bn) in the fiscal third quarter, falling short of estimates. While sales in HP's PC unit rose 2pc to $9.59bn in the similar three-month period, that too missed the average analyst estimate.

"The PC refresh cycle is pushing into next year," Dell chief financial officer Yvonne McGill said after the results. HP chief executive officer Enrique Lores said the release of Microsoft's new edition of Windows software hasn't fuelled 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 workloads would spur demand. But "buyers have yet to see clear benefits or business value", Mikako Kitagawa, an analyst at Gartner, said in report last month.

Dell shares fell about 13pc in pre-market trading on Wednesday after closing at $141.74 in New York. The stock had gained 85pc this year through to Tuesday's close. HP shares declined about 10pc after closing at $39.10. HP stock had increased 30pc this year.

Dell is best known for its computer business, but the Texas-based company has enjoyed a renaissance of investor interest due to its high-powered servers for artificial intelligence workloads. Earlier this month, Dell announced it was shipping servers with Nvidia's new Blackwell semiconductors to cloud infrastructure provider CoreWeave.

Sales in Dell's infrastructure unit including servers rose 34pc to $11.4bn in the period ended November 1, the company said in a statement. That's just ahead of the $11.3bn anticipated by analysts. Total revenue increased 10pc to $24.4bn, missing the average analyst estimate of $24.6bn, according to data compiled by Bloomberg.

The company shipped $2.9bn in AI-optimised servers in the quarter, executives said. The metric was a step down from the $3.1bn reported in the preceding period.

"AI is a robust opportunity for us with no signs of slowing down," Dell chief operating officer Jeff Clarke said in the statement. He touted orders of AI servers in the quarter hitting $3.6bn and growth "across all customer types".

For the quarter ending in February, Dell gave a revenue outlook of about $24.5bn. Analysts, on average, projected $25.4bn. Adjusted earnings will be $2.40 a share to $2.60, compared with the average estimate of $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 California-based company said. Analysts, on average, projected 86 cents.

Reporting on:independent.ie