BBY - Best Buy Stock Is Surging on AI Hype. Is It Time to Buy?
2024-06-19 05:30:00 ET
The post-pandemic economy has been hitting consumer electronics retailer Best Buy (NYSE: BBY) particularly hard. While consumers were keen to upgrade their PCs and purchase new gadgets in 2020 and 2021, that period was followed by a brutal downturn in the PC market. Globally, PC shipment volumes crashed 16.5% in 2022 and 13.9% in 2023, according to IDC.
Best Buy is dependent on consumer excitement for new products, something that's largely been absent for the past couple of years. Comparable sales slumped 6.1% in the first quarter of fiscal 2025, adding to a 10.1% tumble in the first quarter of fiscal 2024. For the full year, Best Buy is expecting a small comparable sales decline.
Best Buy stock has been hammered since peaking in late 2021, but it's been surging since the company reported earnings in late May. The reason appears to be artificial intelligence , specifically the potential for AI-infused devices to boost demand and prices. While Best Buy stock is still down roughly 37% from its pandemic-era high, it's soared more than 20% in the past few weeks.
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Best Buy Stock Is Surging on AI Hype. Is It Time to Buy?