Forrester Research published an interesting report in August 2014 titled Hardware Is Dead; Long Live Software. The report argued that technology was shifting towards software-driven infrastructure, gradually replacing the need for specialized hardware. While this change is still happening, many believed hardware had lost its importance. Over the years, the focus moved away from hardware, making it seem less relevant.
However, the last five years have challenged this idea and a look at the performance of the hardware and software industries shows a different trend. Over the past decade, the S&P Technology Hardware Industry Index gave a total return of 145%, or 9.4% per year (annualized total return as of March 14; Source: S&P Global). While this was lower than the S&P Software & Services Industry Index, which returned 13.5% per year, things have changed recently. Over the last five years, hardware has done better, with nearly 18% yearly returns compared to 15.6% for software. A similar pattern was seen over the last three years, though in the past year, software has started to perform better again.
The Resurgence of Hardware: Why the Sector Gained Momentum
Deloitte’s December 2024 report, Hardware is Eating the World, highlighted the return of hardware as a key part of technology growth. After years of software leading the way, hardware is now becoming more important, especially with AI-powered devices. Enterprise laptops, once seen as simple tools, are now improving with AI features. Leading computer hardware companies are promoting AI-powered PCs as a way to prepare for the future, lower cloud costs, and improve data privacy. These devices, with offline AI models, can speed up tasks like image creation and text analysis, helping workers be more productive.
The report further elaborates that beyond IT, AI hardware is expanding into the Internet of Things, making smart devices even smarter. While AI is already used in everyday products like toothbrushes, future uses could change industries like healthcare by improving medical devices. Vivek Mohindra, senior vice president of corporate strategy at Dell Technologies, points out that 30% of PCs worldwide are outdated and lack neural processing units (NPUs) to take advantage of AI improvements. Deloitte noted that AI PCs are expected to make up 40% of PC shipments by 2026, and AI-powered smartphones are also becoming more common. Experts the report quoted, compared this shift to the move from command-line computing to graphical interfaces in the 1990s. With large technology companies adding AI to their devices, hardware is becoming an even bigger part of technology’s future.
In summary, the growing role of hardware shows its increasing value in the tech industry. As AI adoption speeds up and companies invest in better computing technology, hardware innovation will continue to grow. This renewed focus on hardware presents strong investment opportunities, especially in companies leading the AI revolution. As hardware and software continue to work together, businesses at the center of this change could see strong long-term growth. For investors looking to take advantage of this trend, choosing the right hardware stocks backed by billionaire investors could be a smart move.
We have curated a list of hardware stocks just serving this purpose. So, let’s explore the 10 best computer hardware stocks to buy according to billionaires.
A technician at a sophisticated computer hardware rig, emphasizing the company’s chip-manufacturing capabilities.
Our Methodology
To identify the 10 best computer hardware stocks to buy according to billionaires, we compiled a preliminary list of hardware stocks using a review of ETFs and financial media reports. We then analysed Insider Monkey’s database of billionaire holdings to determine the most favoured hardware stocks among those investors. We then ranked top 10 of these stocks in ascending order based on the number of billionaire investors holding positions in each company as of Q4 2024. Additionally, we also provide data to assess hedge fund sentiment surrounding these stocks, utilizing data from Insider Monkey’s Q4 2024 hedge fund database to provide deeper insights into institutional investor trends.
Note: All pricing data is as of market close on March 14.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Computer Hardware Stocks to Buy According to Billionaires
10. Pure Storage Inc. (NYSE:PSTG)
Number of Billionaire Investors: 7
Billionaire Holdings: $392 Million
Number of Hedge Fund Holders: 30
Pure Storage Inc. (NYSE:PSTG) is a data storage and management company. It provides all-flash storage solutions designed to deliver high-performance, scalable, and efficient data storage for enterprises. The company specializes in modern data infrastructure through its portfolio of products, including the FlashArray, FlashBlade, and Evergreen and Portworx subscription services, which offer cloud-ready storage solutions for analytics, AI, and business applications.
In Q4 2025 (FY ends in February) results call, Pure Storage Inc. (NYSE:PSTG) management focused on advancements of its technology, increasing storage capabilities of products such as Pure Fusion v2. The company reported a design win with a hyperscaler who features in four top companies which was very positive towards demand of its products. For FY 2025, company revenue grew by 12% to $3.2 billion, with the company crossing $3.0 billion for the first time. Subscription services revenue continued to drive growth as it reached $1.5 billion, up a strong 22% year-over-year. However, total gross margin was weaker-than-expected at 71.8%, down from 73.2% in FY 2024.
Following the earnings, a Susquehanna analyst revised the price target for the company to $75 from $80 earlier, but reiterated a Positive rating on the stock. Despite the lower price target, the analyst believes that the company remains well-positioned to capitalize on the diversification of its product portfolio. Additionally, the ongoing transition to a subscription-based revenue model is expected to enhance the stability and predictability of its revenue streams.
9. Logitech International S.A. (NASDAQ:LOGI)
Number of Billionaire Investors: 7
Billionaire Holdings: $242 Million
Number of Hedge Fund Holders: 25
Logitech International S.A. (NASDAQ:LOGI) designs software-enabled hardware solutions. It develops and markets peripherals and accessories that enhance digital experiences across computing, gaming, video conferencing, and content creation. Its product portfolio includes keyboards, mice, webcams, gaming gear, and video collaboration tools used by enterprises and individuals worldwide.
On March 7, Wedbush analyst Alicia Reese upgraded Logitech International S.A. (NASDAQ:LOGI) from Neutral to Outperform and raised the price target from $100 to $125. The upgrade was underpinned by insights from the company’s recent investor day, where management highlighted a strong organic growth trajectory driven by gaming tailwinds and expansion into new markets. The analyst further noted that the company emphasized its commitment to sustaining this growth by prioritizing smaller, strategic acquisitions over large-scale mergers and acquisitions (M&A), ensuring its workforce remains focused on core business opportunities.