NEW YORK ( TheStreet) -- The economic downturn didn't make 2009 the best year for giant technnology companies, but our top tech stock picks for 2010 have big plans in place to build a stronger future.


Amazon ( AMZN) made its name selling books online, but like Google ( GOOG - Get Report), it has become synonymous with the Internet revolution. An e-commerce trailblazer, Amazon is the poster child for online retail, leaving rivals such as eBay ( EBAY) trailing in its wake.

Even during the recession, when both online and brick-and-mortar retailers were diving for cover, Amazon grew its business. Crucial for investors, this momentum is expected to continue into 2010.

"This is one of the few large-cap companies in the tech space that will still grow significantly," Youssef Squali, an analyst at Jefferies & Company, told TheStreet. "We're expecting topline growth to accelerate from the mid-20s this year, in a bad economic environment, to about 30%."

During the third quarter, as U.S. consumers emerged bleary-eyed from the economic downturn, Amazon reported sales of $5.45 billion, an increase of 28% on the same period in 2008. Perfectly positioned to reap the rewards of holiday spending, the company is expected to go from strength to strength.

After growing more than 165% this year, Amazon's stock is on an upswing and the Seattle, Wash., firm is gearing up for a bumper 2010. Merrill/BofA recently increased its Amazon numbers through 2011, citing a continued shift toward online shopping this holiday season.

With impressive customer service, shipping and order fulfillment, Amazon has built a foundation from which to target new areas, including the launch of new technology, such as its popular Kindle e-book.

Solid fundamentals, though, will prove the biggest factor in Amazon's 2010, according to Squali.

"It's the way they are run," he said. "Their strategy is to offer the best user experience with the best price -- for the longest time that was missing from the majority of e-commerce players."

--Reported by James Rogers in New York

Next Top Tech Stock: Comcast


Until last week's $30 billion deal to join programming forces with GE's ( GE) NBC Universal, Comcast ( CMCSA - Get Report) was just a big cable company locked in a joyless battle to win disloyal video subscribers.

Comcast has made a bold move to get one foot out of that rut.

The discussions about the deal have explored so-called vertical integration, whatever that is. And media and Internet blogger Henry Blodget called the pact a double hedge against rising programming fees and the falling value of cable's TV and Internet distribution system.

But ultimately, it looks like Comcast is seeking control at a time when the Internet threatens to bring chaos to yet another corner of the digital media market. The Internet is poised to do what cable companies have opposed for years--unlimited, a la cart on-demand video. And this being the Net, it would all be free, or at least advertiser driven.

Comcast may have coined the phrase "TV Everywhere," but television has been the working objective for tech shops ranging from Apple and Google to device makers like SlingMedia and Roku.

The move by Comcast is somewhat similar to the strategy deployed by Verizon ( VZ) and AT&T ( T) when they moved into wireless. The telcos sought more control as they watched their core landline business erode as consumers made more calls from cell phones.

With video available on the Internet and wireless devices, consumers can't be expected to stick with the old system where cable TV listings dictate when shows can be seen. The challenge for Comcast and NBC Universal is to find a way to charge for programming or develop an advertising supported format. Hulu, the free video service run by Disney ( DIS), NBC and News Corp ( NWS), is seen as the right delivery method. It's up to Comcast to find a way to make money off it.

If Comcast's gambit is successful, users who would otherwise bypass the cable subscription model, could still be willing to pay for TV and movies when and where they want it.

Unlike its peer Time Warner Cable ( TWC), which relishes its role as a pure-play cable shop and has no qualms about being in the video distribution business, Comcast is building for a future beyond that.

--Reported by Scott Moritz in New York

Next Top Tech Stock: Microsoft


It's hard to think of the world's dominant computer software developer as an underdog, given Microsoft ( MSFT - Get Report)'s lock on the market. But after a couple major setbacks -- the stunning failure of Windows Vista, the firm's near ouster of the smartphone market -- Microsoft has lost quite a lot of business. The challenge for Microsoft will be to retake some of that lost ground, and its new Windows 7 operating system is the crucial weapon in which to lead the attack.

Windows 7 is already off to an encouraging start. Microsoft successfully delivered the widely-praised operating system on time in October, well ahead of the holiday buying season.

The big opportunity for Microsoft next year: Cell phones. After Microsoft's long line of cumbersome, crash-prone mobile operating systems, Windows Mobile 7 could be a standout achievement.

Skeptics will point out that Microsoft has whiffed badly at mobile, while upstarts like Palm ( PALM) and Research In Motion have hit it hard. And there's no guarantee that Microsoft will alter that pattern.

But there are some positive signs. First of all, in a shift away from its old drop-down menu interface, Microsoft seems to have gotten on board with the favored touchscreen user-control software. Secondly -- even more important -- hardware and processor power may have finally caught up with Microsoft's notoriously heavy demands on resources.

Apple's iPhone and Google's Android operating system made great strides this year in delivering consumers Web-integrated, easy-to-use software with loads of cool apps. Microsoft's big edge is in the more serious stuff like its Office applications, which could bode well for the company as the power of yesterday's laptops comes to a new generation of smartphones. The ability to run stable, secure, uncompromised work programs like Outlook and Word on phones could be Microsoft's sweet spot in 2010.

--Reported by Scott Moritz in New York

Next Top Tech Stock: Red Hat

Red Hat

Open source means big bucks, as highlighted by the brouhaha surrounding Oracle's ( ORCL) attempt to acquire Sun ( JAVA) and its MySQL technology. Cue Red Hat, ( RHT )which was recently described as a "mini-Microsoft" because of its dominant position in the Linux market. With a $5 billion market cap, Red Hat touts itself as the most recognized open source brand in the world, thanks in part to its fancy red fedora logo.

Microsoft's Windows may be the go-to system for many businesses, but that doesn't mean that companies aren't considering Linux enterprise options. During its recent second quarter, Red Hat's sales jumped 12%, none too shabby given that Mr. Softee's revenue dipped 14% in its most recent results.

Red Hat, which competes with Novell ( NOVL) and Oracle, also enjoyed subscription revenue growth of 15% for both the quarter and first half of fiscal year 2010.

The company's shares surged following the results, and Red Hat's stock has risen a whopping 114% this year.

Last month, Standard & Poor's raised Red Hat's corporate credit rating from 'BB' to 'BB+', which the company cited as evidence of their strong performance and growth during a challenging global economic environment.

Although recently downgraded by Goldman Sachs on a valuation call, Red Hat has been striking a bullish tone in recent months, ramping up its virtualization efforts

Red Hat, which recently celebrated its ten-year anniversary as a public company, has also attracted M&A chatter.

Barron's, for example, cited Red Hat as one of the tech sector's most likely acquisition targets. There has even been speculation that IBM ( IBM) IBM or Oracle could be potential suitors, although whether Larry Ellison has the stomach for another major purchase following the Sun deal remains to be seen.

Whether Red Hat is in IBM or Oracle's sights or not, the company will remain in the spotlight in 2010.

-- Reported by James Rogers in New York

Next Top Tech Stock: RIM

Research In Motion

Research In Motion ( RIMM) has proved that even the most nimble of players in tech can fall a step or two behind in the race toward innovation.

If Apple's iPhone success didn't make it clear, the consumer shift toward Web-friendly, application-rich, touchscreen-driven devices was crystallized by the popularity of Google Android phones.

RIM tried to respond with the touchscreen BlackBerry Storm, but its floating, clickable screen didn't stack up well against the iPhone's more versatile multi-touch design.

The BlackBerry maker was caught flatfooted in 2009 with its crop of updated devices, which featured neither a significant revamp in design nor a modernized operating system.

RIM has defended its operating system, touting its simplicity of design. The company stresses that the beauty of the BlackBerry is its brainy network, which instantly pushes email and syncs calendars and contacts sans any user effort.

That, however, won't do in this expanding world of mobile computing. RIM is no doubt developing new devices that can do the double duty of providing business users secure email while giving consumers and easy to access mobile Internet.

With each new BlackBerry generation, RIM has demonstrated skill in delivering sleek powerful devices. A look back at the tiny BlackBerry Pearl and the very capable BlackBerry Curve shows the company's success in reaching beyond its business-user specialty and into the consumer market.

RIM is too nimble to fall far behind in the game it helped invent.

--Reported by Scott Moritz in New York

Next top Tech Stock: VMware


VMware ( VMW - Get Report), which recently forged a cloud partnership with AT&T ( T) and Sun, has enjoyed a good 2009.

The Palo Alto, Calif.-based firm blew past Wall Street's estimates in its recent third-quarter results, boosted by an uptick in spending by the U.S. government.

With a fourth-quarter budget flush acting as a tailwind and an overall improvement in the economy, 2010 bodes well for the company.

"VMware is one of the stocks to watch for next year," Kaushik Roy, an analyst at Wedbush Morgan, told TheStreet. "I think there's more upside for VMware than someone like NetApp ( NTAP)."

Still the dominant force in the virtualization software market, VMware is well positioned for firms' post-recession upgrades.

Desktops, in particular, could open up a massive new revenue stream in 2009. With a PC refresh likely following the launch of Microsoft's Windows 7, Roy thinks that many firms are likely to deploy virtualize their desktops.

"Server virtualization is an instant ROI but if there are PC desktop upgrades, then desktop virtualization will start to really take off," he explained. "VMware is defining what the computing paradigm might look like five years from now."

Virtualization lets users divide physical hardware into multiple 'virtual' chunks and has grown in popularity among users juggling a myriad of operating systems and applications. With companies also struggling with budget pressures, VMware and its rivals are pushing virtualization as a way for firms to reduce the amount of server and storage hardware within their data centers.

The company's shares have risen more than 80% this year, from $24 to over $44. Trading at almost 70 times earnings, VMware is not exactly cheap, although the company is clearly positioning itself for a tech spending rebound.

The AT&T partnership, for example, came hot on the heels of a deal with networking giant and parent company EMC ( EMC) to sell pre-packaged hardware and software for companies' cloud efforts.

VMware CEO Paul Maritz has made cloud one of his top priorities and expects a boost from both Windows 7 and Intel ( INTC)'s Nehlaem processor. Investors should also expect to see VMware forge more strategic alliances as the Palo Alto-based firm attempts to squeeze rivals Citrix ( CTXS), Microsoft and Oracle.

--Reported by James Rogers in New York

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