Battered tech darlings look cheap
The sexiest names in technology have been hit hard in a U.S. stock sell-off, but some investors are already betting on a comeback while others are sticking with the sector but switching to other stocks.
Fund managers and analysts say widespread fears over the effects of a U.S. recession have knocked out most of the “momentum money” that propelled the four big names in tech investing in 2007 — Google Inc (GOOG.O: Quote, Profile, Research), Apple Inc (AAPL.O: Quote, Profile, Research), Amazon.com Inc (AMZN.O: Quote, Profile, Research) and Research In Motion Ltd (RIM.TO: Quote, Profile, Research).
In the first few weeks of 2008, their valuations have been dragged down to much more appetizing levels, leaving some to argue that it will be worth getting back into these stocks by the second quarter of the year.
“The volatility is going down right now, and once the current uncertainty plays out, it’s opening up a fabulous buying opportunity,” said Jeffrey Lindsay of Sanford C no fax payday loans. Bernstein.
Indeed, there were signs that tech was, at least partially, coming back into favor on Thursday as Microsoft Corp (MSFT.O: Quote, Profile, Research) reported strong earnings and raised its outlook.
In late after-hours trading, Microsoft shares were up 9 percent from their Nasdaq close on Wednesday.
Google, Amazon and RIM have lost about 15 percent of their market value each since the start of the year, while Apple shares have shed about 30 percent. The Standard & Poor’s 500 Index has dropped about 8 percent in that time.
The declines reverse some of the steep price increases seen in the last half of 2007, when investors viewed technology as a safer bet than a financial services sector grappling with the fallout from a subprime mortgage crisis.
Filed under: marketing, technology by John