As second-tier technology companies release fourth-quarter earnings this week, investors are likely to get a better view of the industry's strength as the economy rebounds.
Amazon (AMZN), Yahoo (YHOO), EMC (EMC) and Qualcomm (QCOM) are expected by analysts to show solid earnings gains and close out 2010 on an up note, as the recovering economy late in the year boosted demand for their products and services.
That sets the stage for potentially big gains in 2011. Technology stocks should benefit from customers' postponement of capital spending for the past two years, which means many are in dire need of upgrades to computer systems. Their large-cap shares are seen as cheap on a historical basis as they haven't participated much in the market's run-up over the past two years.In addition, the increasing use of the Internet and the potential growth in advertising on Web pages, the booming use of mobile-computing devices and the concurrent demand for data storage -- thanks to the growth of cloud computing -- contribute to a positive outlook for each of these firms, in one way or another. For example, only 14% of global advertising spending is currently online, according to advertising research firm ZenithOptimedia, so Amazon and Yahoo are in the forefront of firms that could tap into future growth. And EMC has been the data-storage industry leader for 30 years and has the wherewithal to continue in that role as it's already a player in the booming cloud-computing business. Potentially contributing to investor confidence in these companies is that their executives all have "skin in the game," a term coined by renowned investor Warren Buffett. It refers to top executives' investment in their own companies. What follows are the fourth-quarter earnings expectations of four large tech companies, arranged by reporting dates, starting with Yahoo.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV