Last week IDC announced that PC shipments dropped a whopping 14% worldwide last quarter --the worst yearly decline since 1994. It was the fourth consecutive quarter of declining year-over-year sales and much worse than the 7.7% decline IDC had expected. In slightly better news, competing technology consultancy Gartner group said the number of PCs shipped for the quarter was the lowest since the second quarter of 2009.
Some of the blame is being laid at the feet of Microsoft's (MSFT) widely anticipated then quickly forgotten Windows 8 release. Others say the quarter was a result of the long decline in PC sales in favor of Apple (AAPL) software and tablets. Whatever it is driving the slowdown, Jon Najarian, co-founder of OptionMonster.com, says Microsoft is going to be fine.
Noting the truly horrible numbers out of Dell (DELL) and Hewlett-Packard (HPQ), which both lost dramatic share to China-based hardware leader Lenovo, Najarian puts forward the notion that the Windows indifference is being overstated.
"Maybe people are buying some Windows 8 even if it's just Lenovo selling it," he suggests. Windows came to the tablet market late, barely getting a toe-hold into the market stealing the most share from desktops and laptops.
Najarian thinks Microsoft stock is a buy into the heart of downgrades last Thursday. Citing the high yield and unlikelihood of a major downside shock sending shares much lower, Najarian's strategy is staying long the common and selling premium. That way he gets MSFT's 3% yield and another 7% or so from selling call insurance.
Hope springs eternal regarding what was once the world's most valuable company. "I don't think it's the end for Microsoft," Najarian says. It's not much but it is about the most bullish thing said about the company all month.