It's hard to find good talent, especially when unemployment continues to trend lower as it has in 2017.
Indeed, that old adage plays right into a favorable longer-term outlook for the nation's biggest tech companies. "The outlook for technology over the next decade is strong, particularly given the structural shortage of labor," researchers at Fundstrat said in a new note on Friday, Dec. 15. The Fundstrat team pointed to 1948-1967 and 1991-1999 as periods with structural labor shortages that proved to be times when business innovation boomed.
More importantly, tech stocks did well during those periods (see the dot-com boom) as companies invested in machines and software to replace the lack of human availability. It could easily be argued that the current labor shortage is no different, setting up well for companies such as Alphabet Inc. (GOOGL - Get Report) , Microsoft Corp. (MSFT - Get Report) and Facebook Inc. (FB - Get Report) that are leading tech innovation.
About 73% of businesses had trouble finding qualified workers, according to a survey in January by the Associated General Contractors of America. The same poll revealed that 55% of companies identified worker shortages as a bigger problem than federal regulations (41%). A June 2017 survey of small businesses by U.S. Bank found that 61% of employers were having "extreme" or "moderate" difficulty finding quality employees.
Fundstrat laid out several potential stock ideas based off its worker shortage thesis: Adobe Systems Inc. (ADBE - Get Report) , Intuit Inc. (INTU - Get Report) , Harris Corp. (HRS - Get Report) , Motorola Solutions Inc. (MSI - Get Report) , Automatic Data Processing Inc. (ADP - Get Report) , Fidelity National Information Services Inc. (FIS - Get Report) , Visa Inc. (V - Get Report) , Alphabet, IBM Corp. (IBM - Get Report) , KLA-Tencor Corp. (KLAC - Get Report) , Lam Research Corp. (LRCX - Get Report) , Nvidia Corp. (NVDA - Get Report) , Texas Instruments Inc. (TXN - Get Report) and Xilinx Inc. (XLNX - Get Report) .
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