Despite macroeconomic challenges, the tech hardware industry is experiencing solid growth due to the broad adoption of technology, rising investments in digitization, and the uptake of emerging technologies.

Given the industry’s growth potential, it could be wise to buy fundamentally strong hardware stocks: HP Inc. (HPQ – Get Rating), Dell Technologies Inc. (DELL – Get Rating), and Daktronics, Inc. (DAKT – Get Rating).

Before diving deeper into the fundamentals of these stocks, let’s discuss why the tech hardware industry is well-positioned to grow.

The tech hardware sector is evolving as enterprises increasingly use technology to engage customers, drive innovation, and boost efficiency. Advanced hardware and equipment are making software relevant. Hardware becomes crucial as it provides the necessary physical infrastructure, which allows the smooth functioning of software.

Investing in advanced hardware and equipment helps improve productivity and efficiency. According to Gartner, global IT spending will reach $4.69 trillion in 2023, marking a 3.5% increase year-over-year. Although spending on devices is expected to decline 10% in 2023, it is projected to rise 4.8% year-over-year to $722.47 billion in 2024.

The IT hardware market is expected to grow at a CAGR of 7.9% to reach $177.11 billion by 2028. Furthermore, the demand for specialized hardware is rising due to the rapid adoption of emerging technologies like artificial intelligence (AI), machine learning, the Internet of Things (IoT), augmented reality (AR), and virtual reality (HPQ – Get Rating)

HPQ provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally. The company operates through three segments: Personal Systems; Printing; and Corporate Investments.

In terms of the trailing-12-month net income margin, HPQ’s 4.27% is 110.6% higher than the 2.03% industry average. Likewise…

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