This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Tech Stocks to Watch if IT Budgets Decline

Stocks in this article: JNPR CSCO INTC BRCM RVBD AAPL EMC ORCL CTXS NVDA

NEW YORK ( TheStreet) -- The cloud may not be advancing as quickly as the headlines seem to indicate, while software and security look like areas where companies don't plan to skimp even if the economy sinks into a protracted downturn.

Those are just two of the findings of a new survey of chief information officers conducted by JPMorgan analysts. The research reflects data compiled in two separate rounds of questioning. 100 CIOs participated in the first round, which was conducted in the late July to mid August timeframe, while 84 participated in the second round during the first three weeks of September, when the survey concentrated on spending budgets.

"According to our CIO survey, software, security, and server virtualization remain top IT priorities," the firm writes. "Tablet and mobile device integration in enterprise environments also ranked high. Meanwhile, the pace of cloud adoption seems slower than all of the marketing hype would suggest. On a more cautionary note, services, printing, and PCs appear most at risk if IT budgets come under protracted pressure."

The hard news from the survey is that 28 of the 84 CIOs participating in the follow-up round said they were planning to change their prior 2011 IT spending plans with 24 of those saying a decrease was in the offing. Of those 24, 10 were in control of budgets ranging from $500 million to $1 billion. The overall percentage of CIOs who were lowering their spending on a year-over-year increased to 31% in the follow-up round from 22% in the initial round.

"In our view, this sort of sudden change related to medium to large-sized budgets in 30-45 days suggests that more cuts are likely in the near to mid term," JPMorgan said, adding later: "Our main concern is that the next few months could become tougher if macroeconomic challenges persist and the U.S. Dollar continues to strengthen. When the U.S. Dollar strengthens the cost of procuring IT goods and services from the U.S. becomes higher, and this currency dynamic has been a thorn in the past."

A bit of information on the CIOs participating in the survey. The firm said 66% of the executives worked at companies with 10,000 employees or more, and that 75% had IT investments concentrated in North America with the remainder split between the EMEA Europe, Middle East, and Africa region (13%) and Asia-Pacific (12%).

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs