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By Andrew Leckey
Why do tech stocks build us up just to let us down?
Technology's track record is one of dramatic peaks and valleys for its investors. However, its most recent run-up seems to have more fundamentals behind it than many of the past periods of hype.
Corporate customers for tech products have considerable money to spend these days, and some true technological innovations are driving momentum. Tech will inevitably have pullbacks along the way, but signs are pointing positive.
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"While technology stocks have had a good run-up this year, I still do not view their price multiples as being that rich," said Roger Kay, president of the
He even believes that the high-profile stock of
"Tech stocks stepped up their pace and momentum beginning last September and into this year because most people do not believe there is going to be a double-dip recession," said Scott Kessler, senior director in information technology with Standard & Poor's
In addition, consumer companies such as
"The two current massive waves taking place in technology investing are cloud computing and mobile computing, which will drive technology spending for many years to come," said Robert Turner, chairman and chief investment officer of
Cloud computing is the general term for on-demand hosted services over the Internet that require only a computer and Internet access. The provider handles such functions that traditionally are handled by a client's in-house hardware and software.
Among cloud computing firms,
All three experts interviewed here remain high on prospects of the stock of global brand Apple, though acknowledging its potential is much discussed and hardly a surprising investment story. Turner believes that even if Apple is just able to retain its 18 percent share of the smart phone market, it will "do just fine."
Both Kessler and Turner also admire the shares of previously mentioned
Turner also recommends British-based
Chip-maker
Looking overseas, Kessler likes the prospects of one tech firm in China and another in Israel:
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Because technology stocks can be volatile, owning a diverse mix of several stocks or a tech mutual fund is usually the best bet.
Available at Amazon.com:
The Triumph of Value Investing: Smart Money Tactics for the Postrecession Era
Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back
What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions
Investing - Tech Stocks Volatile But Undeniably Strong | Successful Investing
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