Tech Stocks Poised For Further Gains As Sentiment Picks Up
2009年8月29日 - 12:47AM
Dow Jones News
Technology titans are starting to see a pick-up in spending,
which could propel their share prices even further in the coming
months.
A number of technology bellwethers are starting to find their
footing, from networking giant Cisco Systems Inc. (CSCO) to
computer maker Dell Inc. (DELL). Most recently, Intel Corp. (INTC)
lifted its third-quarter revenue estimates on surprisingly strong
demand. The need for upgrades in the coming months is seen as
another catalyst for spending. Taken together, they paint the
picture of a stabilizing environment, which should give comfort to
investors.
"We're in for sustained improvement in their stock prices," said
Trip Chowdhry, an analyst for Global Equities Research. "We're in
for more comfort."
Tech shares have already been on a tear for the year but more
recently have lagged the broader market. Since the beginning of
August, the Standard & Poor's 500 index is up 5%, while the
Nasdaq Composite Index is up 3%.
Over the past five months, however, the Nasdaq has surged 61%,
while the S&P index advanced 51%.
"We've been pretty surprised at how resilient companies have
been," said Carl Howe, an analyst at research firm Yankee Group. He
noted the strength was driven on the continued need for wireless
and Internet spending despite the downturn.
A major boost in the coming months will be the push to upgrade
to the next version of Microsoft Corp.'s (MSFT) Windows operating
system. The need to change up the software will require
corresponding hardware upgrades, benefiting a number of tech
companies.
Earlier Friday, Intel raised its third-quarter revenue forecast
to $9 billion, plus or minus $200 million, compared with its prior
projected range of $8.1 billion to $8.9 million. Late Thursday,
Dell executives expressed optimism about renewed spending, echoing
earlier comments from Hewlett-Packard Co. (HPQ) and Cisco.
Intel rose 4.8% to $20.40 in recent trading; Dell rose 4.3% to
$16.35; Microsoft rose 1.6% to $25.07; and Cisco rose 1.1% to
$22.13. Shares of Intel rival Advanced Micro Devices Inc. (AMD)
gained 5.2%, while analog chip maker Texas Instruments Inc. (TXN)
rose 2.2%.
Microsoft stands to benefit since more companies will be
upgrading to Windows 7 versus those that held off moving to the
troubled Windows Vista operating system. Because many companies
skipped the last upgrade, their equipment is due for an overhaul,
Chowdhry said, adding he believes business spending will drive the
tech companies.
The need for equipment upgrades will also greatly benefit Intel,
which will also likely see an upgrade cycle driven by sales of
Apple Inc. (AAPL) computers using its chips. While PC makers will
see a boost, they're still bogged down by a number of cheaper
competitors.
Other technology companies that will see a relatively strong
lift are Arm Holdings Plc (ARMH), which will benefit from
increasing demand in so-called smartbooks, Sybase Inc. (SY), which
is tied into mobile messaging services and programs in the business
world, and VMWare Inc. (VMW), which is the main driver of the move
to virtualized data centers.
Apple, meanwhile, will see gains on both the computer and mobile
side. The company's new operating system, dubbed Snow Leopard, will
require hardware upgrades. It also recently struck a deal with
China Unicom Ltd. (CHU) to bring its iPhone to China, tapping into
a huge new market.
Apple shares rose 0.5% to $170.33; Arm rose 2% to $6.48; Sybase
slipped 0.3% to $35.04; and VMWare rose 2.5% to $35.86.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153;
roger.cheng@dowjones.com