Don't Get Too Excited About Tech Just Yet


from Barron's

With the Nasdaq up over 22% year-to-date and many tech stocks on the receiving end of big upgrades recently (Goldman practically proposed to Google this past week with their endorsement), many investors have begun digging in the crates for some of their old favorite tech stories again.

Eric Savitz‘s Technology Trader column in Barron’s today should give them pause; he talked to several high profile execs in techland who actually see things getting worse, not better.

Eric talks to the CEO of Intuit Software:

…in previous recessions, the rate of company formation rose as experienced employees left larger companies to venture on their own. But this time, he says, company creation is 50% of normal; lack of capital makes starting new ventures impossible for many would-be entrepreneurs.

Then the CEO of Hewlett-Packard:

Hurd tried hard to sound upbeat, noting that conditions are stabilizing, but he conceded there hasn’t been any pickup yet. And while U.S. IT demand seems to have stopped going down, he sees some areas of Europe getting worse.

Then the CEO of NetApp Storage:

Though NetApp sells to enterprise customers, Gomo still sees weak consumer spending as a problem. He figures it will be difficult for the economy to show robust growth if “the American consumer is pretty much tapped out.”

With earnings season now behind us and the big dogs of tech (ex-Intel) starting to keep it real with the media, what catalysts remain out there that could possibly continue to propel this Nasdaq rally?

Got me!


View From the Top (Barron’s)

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