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Sales were good for the computer and peripherals industry in 1995, with strong demand for both personal computers and mainframes. Less demand should slow sales in 1996, however. Earnings and sales, though, will gain over the next three to five years, especially in foreign markets. Computer and peripheral stocks will outperform the market in 1996 and there is good price appreciation potential for the next three to five years.

The computer and peripherals industry is benefitting from favorable US economic growth, with 8%-9% durable goods expenditure increases expected. European and Asian economies are mixed now, however. Demand in the small business and home markets for PCs is strong, and the new markets in Eastern Europe, Asia, and elsewhere are opening. Many of these stocks are expected to outperform the market in the next three to five years.

Demand for personal computers is high, especially in the small business and home markets. Mainframe sales have also increased, and sales of disk drives and other components are high as a result. However, the personal computer market has leveled off and some potential customers are deferring purchases. International and US economic growth for the next three to five years will be good for these industries. These stocks will outperform the market through 1998-2000.

The computer and peripherals industry will have good sales and earnings through the 1990s. Computers will do well in 1995 and 1996 with a 7.5% durable business equipment expenditure forecasted. Personal computer sales will increase, due to a 3% to 3.5% disposable income growth in the next three to five years. Stocks in this industry will outperform the market in 1995 and 1996, with some showing long-term gains.