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Is Tech Dead?
Some
investors would hold technology stocks at arms length while
holding their nose with their other hand like they’d just
picked up some dead animal on a hot day.
Yes,
the performance of tech stocks has stunk over the past handful
of months, but do technology stocks as a whole stink and will
they continue to stink?
Some pundits say tech will never come back.
Volatility in the tech sector is certainly much greater
than in any other sector. Some tech stocks will be de-listed by NASDAQ officials because
the share price will remain below $1 too long, and some may
close their doors. But,
many of these stocks will be trading at 10 times their current
prices just a few years from now.
If you take a macro view of the world we live in and
the future you will see some very interesting opportunities
and the past year’s stock market will just be a small bump
in the road.
Looking forward we will continue to see technology, and
the companies that develop it grow at a very fast pace.
Although the demand for traditional desktop computers
will be soft, manufacturers will continue to develop faster
chips and these faster computers will be needed and purchased
by users. The wireless
Internet craze, whether implemented through PDA-type devices
from the likes of Palm or Handspring, or on new generation web-enabled
cell phones, will grow at a quantum rate.
We have probably only seen the tip of the iceberg when
it comes to wireless Internet.
Digital cameras that use microprocessors and increasing
amounts of memory will continue to gain market share against
traditional film cameras.
Companies will continue to need Network Attached Storage
(NAS) and every other type of storage imaginable as they create
larger, more graphically intense web sites and then try to keep
track of the buying habits of their customers. Those same companies will cheer every time there is an
opportunity to increase the rate they can send information across
their office network, even if it means throwing out most of
what they currently own and replacing it with new equipment.
And the same will be true with an opportunity to speed
up the rate at which their customers can communicate with their
web site. New software
releases that increase efficiency and provide easier access
to more bells and whistles will soon get a purchaser’s signature
on the bottom of a Purchase Order.
Chip manufacturers will want to take advantage of increased
efficiencies found in $1 billion state-of-the -art manufacturing
equipment. No matter
what the economy or markets do, there will be new technologies,
and buyers of new technology.
The most rapid growth in corporate America will be in
the tech sector, and the greatest likelihood for stock price
appreciation will be in technology companies with good products,
good management, and good financial fundamentals.
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