Best Buy has been having a rough couple of years. After setting a new high of over $120 per share in 2021, its stock tumbled quickly, losing over half its value by October 2022. Since then, the stock has been up and down, never getting anywhere close to its pandemic-era high. But a recent surge may be a sign that things are finally turning around.
Why Best Buy Has Languished In The Pandemic Decade
Best Buy benefited greatly from a surge in PC and gadget buying during the pandemic lockdowns, leading to its 2021 high. But global demand collapsed as the world reopened. In fact, PC shipments worldwide were down by more than 16% in 2022 and nearly 14% in 2023. Best Buy’s entire business model depends on its customers’ enthusiasm for new tech, so its fortunes are inexorably tied to consumer sentiment.
Big Things on the Horizon
Best Buy has finally had some good luck since its May earnings call. Sales are still in a slump, and a small further decline is expected through the end of the year. Yet the company’s stock is turning around. Share prices are still down 37% from their pandemic-fueled high, but they’re up by over 20% in the past several weeks. This is largely due to the AI frenzy, with some experts predicting that this summer will launch the age of the AI PC.
AI laptops have been available for the past several months, powered by Intel’s Meteor Lake chips. But this month will mark the beginning of true consumer-level AI potential, with the first Windows laptops based on the powerful Qualcomm Arm-based AI chips hitting the market. AMD plans to release its own new Ryzen AI chips in July, followed a few months later by Intel’s next generation Lunar Lake chips. Taking advantage of all of this upcoming power, Microsoft plans to release a lot of AI features for Windows.
The AI frenzy is real, and there are a lot of reasons to expect that consumers will line up for these new AI laptops. If that actually turns out to be the case, Best Buy is well poised for a massive turnaround. If not, there still isn’t much downside for Best Buy investors. The company has already weathered the collapse and remained profitable.
Neither Lisa Fritscher nor Stocks.News have positions in this company.
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Lisa Fritscher
Contributing Writer
Lisa Fritscher has been a contributing writer for App.Stock.News since 2024. Lisa has been interested in investing since winning The Stock Market Game in high school. In more than a decade as a professional writer, she has written consumer-facing financial information and advice articles for a wide variety of publications. She has a Bachelor of Arts in Psychology from the University of South Flori...