Tech Hardware
Tech Hardware Strategy
Not investment advice. This page is for informational and educational purposes only. Sterling is not a registered investment advisor. Nothing here is a recommendation to buy, sell, or hold any security. Markets carry risk and you may lose money. Do your own research and consult a licensed professional before making any investment, securities purchase, or trading decision.
Thesis
Why this sector matters to investors right now. Structural, not market timing.
Tech Hardware on Sterling is the S&P 500 residual that existing pages cannot honestly hold: PC and print OEMs, electronic manufacturing services, handset RF, US thin-film solar modules, and the IT distribution and registry layer. It is not AI accelerators (those stay on AI Chips) and it is not data-center interconnect (Ciena, Corning, Amphenol, and NetApp stay on Data Centers). Apple, Dell, HPE, Western Digital, and Seagate are dual-homed so the Companies tab is complete. The 2025 scoreboard is a Windows-and-commercial refresh plus a 24 percent First Solar volume lift, set against EMS mix shift, a shrinking solar backlog, and a 67 percent Apple book at Skyworks.
The investable question is not whether people still buy boxes. Gartner counted 270.2 million traditional PCs in 2025, up 9.1 percent, after two weak years (Gartner, January 2026). The question is which P&L captures replacement demand without being a thin assembler: HP Inc. grew Personal Systems to $38.5B while Printing slid to $16.7B (HP FY2025 10-K); Dell's Client Solutions Group was $48.4B and almost flat while Infrastructure Solutions Group jumped 29 percent to $43.6B (Dell FY2025 10-K); Flex sold $25.8B and printed a record 5.7 percent adjusted operating margin by leaning into cloud programs (Flex FY2025 release). Same page. Different economics.
Structural drivers
Forces that shape long-run demand and economics. Each driver is sourced.
- •The commercial PC refresh arrived in 2025. Gartner put worldwide traditional PC shipments at 270.2 million units, up 9.1 percent from a restated 247.6 million in 2024, after 242.3 million in 2023 (Gartner, January 2025 and January 2026). HP Inc. Personal Systems net revenue rose 6 percent to $38.532B in the fiscal year ended October 31, 2025 (HP FY2025 10-K).
- •Windows 10 end of support on October 14, 2025 pulled commercial replacements forward. Microsoft's lifecycle calendar and Gartner's 2025 commentary both treat the upgrade as a shipment tailwind rather than a new installed-base story (Microsoft lifecycle, Gartner January 2026).
- •EMS mix is moving toward infrastructure programs even when headline sales are flat. Flex FY2025 net sales were $25.813B, down 2 percent, while Communications, Enterprise and Cloud was $8.7B and adjusted operating margin reached a record 5.7 percent (Flex FY2025 release and Q4 presentation). Jabil FY2025 net revenue was $29.802B, with Intelligent Infrastructure at $12.317B after the September 2024 segment recast (Jabil FY2025 10-K).
- •US thin-film module volume is still compounding. First Solar sold 17.5 GW of modules in 2025 and reported $5.219B of net sales, up 24 percent, after 14.1 GW and $4.206B in 2024 (First Solar 2024 and 2025 annual reports and FY2025 earnings). Section 45X credits are a disclosed cost offset in the 2025 10-K.
- •The IT channel participates in the same refresh without owning the factory. CDW net sales were $22.424B in 2025, up 6.8 percent, with notebooks, desktops, and netcomm named as growth categories (CDW FY2025 earnings). Gartner Insights was $5.073B of $6.497B, about 78 percent subscription research (Gartner FY2025 10-K).
- •Registry pricing still outruns domain growth. Verisign ended 2025 with 173.5 million .com and .net names, up 2.6 percent, and $1.657B of revenue, up 6.4 percent (Verisign FY2025 release). GAAP operating margin stayed near 68 percent.
Structural risks
Forces that could compress demand, change economics, or break the thesis.
- •Gartner and IDC do not agree on the size of the PC market. IDC printed 262.7 million traditional PCs for 2024 against Gartner's original 245.4 million (IDC January 2025, Gartner January 2025). A strategy that hangs on one house's unit count is one revision from being wrong.
- •IDC's 2026 outlook is a unit decline. The PCD tracker promo in 2026 cited an 11.3 percent full-year PC shipment decline on memory shortages and higher average selling prices (IDC PCD forecast, 2026). A 2025 refresh can borrow from 2026.
- •Print is still a large, shrinking annuity at HP Inc. Printing net revenue fell from $18.029B in FY2023 to $16.702B in FY2025, and supplies were $10.916B of the FY2025 print book (HP FY2025 10-K). A faster supplies decline would remove the margin ballast that funds PC competition.
- •First Solar's backlog is contracting. Contracted backlog fell from 78.3 GW at the start of 2024 to 50.1 GW / $15.0B at the end of 2025, including 8.3 GW of 2025 de-bookings (First Solar 2023 and 2025 10-K). Volume can stay high while visibility shrinks.
- •Skyworks is a single-customer RF book. Apple was 67 percent of FY2025 net revenue after 69 percent in FY2024 and 66 percent in FY2023 (Skyworks FY2025 10-K Note 14). A handset unit miss or a socket loss is a company event, not a sector event.
- •EMS customer concentration is structural. Jabil's five largest customers were about 36 percent of FY2025 net revenue (Jabil FY2025 10-K). Flex's ten largest were about 44 percent, with no 10 percent customer in FY2025 (Flex FY2025 10-K). Program transfers move billions.
- •Dual-home storage is now an HDD-plus-cloud story that Data Centers already prices. Western Digital continuing-operations revenue was $9.52B in FY2025 after the February 21, 2025 Sandisk separation (WDC FY2025 release). Seagate was $9.097B (Seagate FY2025 release). Treating those names as PC peripherals on this page would steal the Data Centers thesis.
Competitive landscape
How to think about the players. Framing along axes (pure play vs diversified, incumbent vs challenger, etc). Not stock picking.
The roster sorts into five archetypes.
1. Closed-platform hardware (Apple). FY2025 net sales $416.161B, products $307.003B, Services $109.158B, GAAP operating income $133.050B (Apple FY2025 10-K). Dual-homed here as a device OEM.
2. Volume PC and print OEMs (HP Inc., Dell CSG). HP Inc. is the cleaner PC-plus-print residual. Dell's CSG is the PC book. Dell ISG and HPE are dual-homed enterprise hardware that Data Centers already covers for servers and storage.
3. Diversified consumer electronics (Garmin). Five segments, $7.246B, Fitness $2.357B (Garmin FY2025 release). Not a PC OEM.
4. EMS assemblers (Flex, Jabil). Mid-single-digit GAAP operating margins, high customer concentration, rising infrastructure mix.
5. Specialty components, solar, and channel (Skyworks, First Solar, CDW, Gartner, Verisign). These names do not share a demand curve. They share an S&P 500 coverage gap.
Key metrics to watch
The operational and financial metrics that matter most in this sector. Each one names its source and update cadence.
| Metric | Source | Frequency | Why it matters |
|---|---|---|---|
| Worldwide traditional PC shipments | Gartner PC Quarterly Statistics and IDC Worldwide Quarterly Personal Computing Device Tracker | quarterly | The unit cycle prices HP Inc., Dell CSG, and CDW notebooks. Gartner and IDC must be read as a range, not a single print. |
| HP Inc. Personal Systems vs Printing revenue | HP Inc. Form 10-K and quarterly earnings releases | quarterly | Shows whether the company is still a print annuity with a PC attached or a PC OEM with a fading supplies book. |
| Dell CSG vs ISG net revenue | Dell Technologies Form 10-K segment note | quarterly | Separates the PC dual-home from the server dual-home so this page does not steal Data Centers. |
| Flex CEC and Jabil Intelligent Infrastructure sales | Flex earnings presentations and Jabil Form 10-K segment note | quarterly / annual | The EMS mix shift toward infrastructure is the margin story. Headline sales can fall while mix improves. |
| Skyworks Apple revenue concentration | Skyworks Form 10-K customer concentration footnote | annual | Confirms the name is handset RF. A break below a 10 percent Apple disclosure would be a different company. |
| First Solar GW sold and contracted backlog | First Solar Form 10-K and year-end earnings | quarterly / annual | Volume can rise while the backlog shrinks. Both numbers are required to read the book. |
| CDW net sales by channel and Verisign domain base | CDW and Verisign year-end earnings releases | quarterly | Channel dollars track the refresh. Domain base plus revenue growth shows how much of Verisign is price versus units. |
Catalysts and milestones
Known upcoming events that could move the sector. Dated where possible.
- •Gartner and IDC Q2 and Q3 2026 PC shipment prints, and whether IDC's 11.3 percent 2026 unit decline shows up in HP Inc. and Dell CSG guidance.
- •HP Inc. FY2026 Personal Systems unit and Printing supplies commentary after the FY2025 mix shift (next 10-Q cycle).
- •First Solar 2026 volume guidance of 17.0 to 18.2 GW and net sales of $4.9B to $5.2B (FY2025 earnings). A de-booking quarter would matter more than a beat.
- •Skyworks and Qorvo combination updates. Skyworks' October 28, 2025 preliminary release described a planned combination to create a US RF, analog, and mixed-signal company. Close timing and remedy risk are the variables.
- •Flex FY2026 revenue guide of $25.0B to $26.8B and the 6.0 to 6.1 percent adjusted operating margin target (FY2025 presentation).
- •CDW 2026 notebook and desktop commentary as the Windows 10 hangover fades.
What would change the view
Conditions or evidence that would invalidate the thesis or materially shift the risk picture.
- •A live Sterling sector can hold these names without stretching its thesis (for example a dedicated PC page or a dedicated EMS page).
- •Gartner and IDC both print a 2026 unit decline larger than the 2025 rebound, and HP Inc. Personal Systems and Dell CSG guide down together.
- •First Solar backlog falls below two years of shipments without a matching rise in spot sales, or Section 45X treatment changes in a way the 10-K flags as material.
- •Skyworks discloses Apple below 10 percent of revenue, or the Qorvo combination is blocked or recut so the RF book is no longer a handset residual.
- •Flex or Jabil lose a top-five program that is disclosed as a 10 percent customer (Jabil already names concentration. Flex did not have a 10 percent customer in FY2025).
- •S&P Dow Jones Indices remove a material share of this roster, which is the coverage reason the page exists.
What we are not covering
Sub-areas, technologies, or companies we are deliberately excluding from the analysis, and why.
- •AI accelerators, foundry, HBM, and custom ASICs. Those stay on AI Chips. Skyworks is handset RF and is not an accelerator.
- •Data-center interconnect and optical: Ciena, Corning, Amphenol, and NetApp. Assigned to Data Centers in SP500_ELEVEN_SECTORS_SPEC.md.
- •Dell ISG servers, HPE servers, and HDD exabyte shipments as a data-center thesis. Dual-homed here for roster completeness. The economics live on Data Centers.
- •Apple Services, App Store, and advertising. Shown in the product-mix chart so the stack is honest. Not analyzed as a software franchise.
- •Private EMS, Foxconn, Pegatron, Quanta, Compal, Wistron, and Lenovo, ASUS, and Acer. Material to the industry map. Not S&P 500 names on this roster.
- •Custom per-company KPI floors. Deferred on purpose in kpi-floor-deferred.ts.
Sources
Primary sources cited in this analysis. Links open in a new tab.
- Gartner worldwide PC shipments, full year 2025 (January 20, 2026)Accessed 2026-08-26
- Gartner worldwide PC shipments, full year 2024 (January 15, 2025)Accessed 2026-08-26
- IDC worldwide traditional PC shipments, full year 2024Accessed 2026-08-26
- IDC PCD forecast (2026 unit decline commentary)Accessed 2026-08-26
- HP Inc. FY2025 Form 10-K segment informationAccessed 2026-08-26
- HP Inc. FY2025 Q4 earnings releaseAccessed 2026-08-26
- Apple Form 10-K for the year ended September 27, 2025Accessed 2026-08-26
- Apple FY2025 Q4 consolidated financial statementsAccessed 2026-08-26
- Dell Technologies FY2025 Form 10-K segment noteAccessed 2026-08-26
- Dell Technologies FY2025 earnings releaseAccessed 2026-08-26
- Hewlett Packard Enterprise FY2025 Form 10-K indexAccessed 2026-08-26
- Flex FY2025 Q4 earnings releaseAccessed 2026-08-26
- Flex FY25 Q4 earnings presentationAccessed 2026-08-26
- Jabil Form 10-K for the year ended August 31, 2025Accessed 2026-08-26
- Skyworks Form 10-K for the year ended October 3, 2025Accessed 2026-08-26
- First Solar Form 10-K for the year ended December 31, 2025Accessed 2026-08-26
- First Solar FY2025 earnings releaseAccessed 2026-08-26
- CDW FY2025 earnings releaseAccessed 2026-08-26
- Gartner Form 10-K FY2025 segment revenuesAccessed 2026-08-26
- Verisign FY2025 earnings releaseAccessed 2026-08-26
- Garmin FY2025 Q4 earnings press releaseAccessed 2026-08-26
- Western Digital FY2025 earnings release (continuing operations)Accessed 2026-08-26
- Seagate FY2025 earnings releaseAccessed 2026-08-26
- Microsoft Windows 10 end of support lifecycleAccessed 2026-08-26
- S&P U.S. Indices Methodology (PDF)Accessed 2026-08-26
Audit trail
Record of the last review and what changed. Required on every refresh.
Last reviewed: 2026-08-26
Change log
- 2026-08-26Replaced the scaffold strategy with sourced copy from FY2025 10-Ks and earnings, Gartner and IDC PC prints, and First Solar / Skyworks / Verisign / CDW / Gartner year-end releases. Added 15+ primary URLs.
- 2026-08-25Scaffold strategy so the tab renders. Agent must replace with sourced copy.
Unresolved questions
- •Does Dell FY2026 (in progress through mid-2026) change the CSG versus ISG mix enough that the dual-home weighting should flip?
- •Will IDC publish a free 2025 full-year traditional PC total that can sit next to Gartner's 270.2 million without a paywall?
- •How should the Skyworks-Qorvo combination be treated on this page if it closes: still handset RF, or a broader analog residual?
- •Is First Solar's 2026 guide of $4.9B to $5.2B a volume pause or a price reset after 8.3 GW of 2025 de-bookings?
