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.
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.
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