PC Market Starts 2025 With Solid Growth, Tariff Turbulence Looms

The global PC market started 2025 on a strong note, with first-quarter shipments increasing 4.9% year over year to 63.2 million units, according to the data compiled by International Data Corporation (“IDC”). The data was impressive and marked the sixth consecutive quarter of year-over-year growth. However, the near-term prospects of the PC industry seem highly volatile, given an uncertain environment triggered by the U.S. government’s new tariff policies, inflationary concerns and shifting PC upgrade cycles.

First-Quarter Growth: A Pre-Tariff Rush

At first glance, the first-quarter shipment data suggests strong momentum in the PC space. However, much of this growth appears to be driven by strategic stockpiling by vendors and buyers to have front-loaded orders ahead of new tariffs announced by the U.S. government in early April, according to IDC. These tariffs, which are expected to directly impact hardware imports from China, could raise costs for both suppliers and end-users in the coming quarters.

Per IDC, many players in the PC supply chain made calculated decisions to accelerate shipments in the first quarter to avoid additional tariff pressure. This makes the first quarter look stronger than it might have otherwise been. However, this elevated first-quarter performance has introduced uncertainty about how the rest of the year will unfold once the full impact of the tariffs takes hold.

Commercial Demand Still Intact

Though the first-quarter performance benefited from a pre-tariff stockpiling strategy, there are signs that some underlying drivers of PC demand remain healthy, particularly for commercial PCs. The demand for commercial PCs is likely to be driven by two structural tailwinds.

First, businesses are likely to refresh PCs ahead of the end of Microsoft’s Windows 10 support in October 2025. Second, rising interest in PCs equipped with on-device AI capabilities could be a major demand booster for the PC industry.

These trends have helped sustain steady demand in the first quarter. It is most likely that even if consumer sentiment weakens due to pricing pressure, the enterprise refresh cycle and AI-enabled device innovation could provide some insulation for PC manufacturers.

Vendor Performance and Market Share

Among the top five vendors, Lenovo LNVGY retained its market-leading position with 15.2 million shipments and a 24.1% market share, up from 22.8% in the same period last year. HP Inc. HPQ followed with 12.8 million shipments, gaining modestly from last year, while Dell Technologies DELL posted a smaller increase of 3% to reach 9.6 million units. HP and Dell Technologies had a market share of 20.2% and 15.1%, respectively.

Apple AAPL, however, stole the spotlight with the highest growth among the top players. Its first-quarter shipments surged 14.1% year over year, reaching 5.5 million units. Apple ended the quarter with a market share of 8.7%.

ASUS also stood out, growing shipments by more than 11.1% to capture a 6.3% market share. Meanwhile, smaller manufacturers categorized under “Others” saw a collective decline of 3.6%, indicating that market share is consolidating toward larger, more resilient players.

What’s Ahead for the PC Industry?

The April 2 announcement of new U.S. tariffs has introduced a wave of uncertainty. As of now, companies have yet to fully respond, but Ryan Reith, group vice president of IDC's Worldwide Device Trackers, believes it's only a matter of time before strategies shift. Vendors would start evaluating multiple options like relocating manufacturing, adjusting inventories or negotiating trade exemptions. However, Ryan opines that no matter what approach vendors would undertake, it is most likely that cost increases will ultimately hit consumers and enterprise buyers.

That raises the risk of delayed purchases in the coming quarters. If hardware becomes more expensive and economic sentiment weakens further, even a strong commercial refresh cycle may not be enough to sustain demand at the first-quarter levels.

Bottom Line

The PC market showed strong early traction in 2025, but the underlying picture is anything but stable. The pre-tariff inventory pull-in inflated first-quarter numbers and cast a shadow over the rest of the year. Investors should expect heightened uncertainty as the effects of tariffs begin to bite, especially if inflation and macro risks escalate.

Of the leading vendors, HP, Dell and Lenovo each carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, Apple has a Zacks Rank #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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