This Day On The Street
Continue to site
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

Tech Sector: Buy, Sell, Hold?

Other technology companies that look like they'll see softer than expected sales because of government spending cuts and delays in spending decisions from corporate purchasing officers include EMC (EMC), Juniper Networks (JNPR), Cisco Systems (CSCO), F5 Networks (FFIV) and pretty much any company in the PC sector. The government and businesses, by and large, buy from Dell (DELL) and Hewlett-Packard (HPQ) and Microsoft (MSFT) -- not from Apple (AAPL).

The list of companies in the other part of the technology sector is shorter -- there are relatively fewer technology companies that focus on the consumer than on enterprise and government sales -- and here the risk is a slowdown in the general economy that would inhibit consumer spending and -- as Apple shares have demonstrated so aptly recently -- that a company won't get a hot product to market on the schedule that Wall Street expects or the product won't be as hot as analyst projections assume.

Companies I'd put in this list include Apple, (AMZN), Google (GOOG), Facebook (FB) and eBay (EBAY).

I wouldn't rush out and buy any members of this group, though. I think we're looking at a modest slowdown in second quarter U.S. GDP growth that is likely to throw a scare into analysts and bring about another round of cuts to earnings projections and target prices across the technology sector. The time to buy will be sometime in July (maybe) or August (more likely) when these cuts have reset the earnings bar really, really low for these companies in the last two quarters of the year.

That sounds like the usual recipe for a third and fourth quarter technology rally, but this year I think the leaders in that rally -- and maybe the only technology companies to really get much of a boost from the usual end of the year sales increase in the sector -- are likely to companies in that part of the technology sector with more consumer and less government/enterprise exposure.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV


Chart of I:DJI
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASDAQ 4,776.5080 -51.8170 -1.07%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs