By Daniel Sholler, University of Pennsylvania
Amidst the economic climate, many, including myself, have suggested leaving certain tech stocks alone while the recent news throughout the industry sets in. While some strategists are getting behind stocks like Apple (AAPL), I’m sticking behind input-oriented companies and tech services. As I previously wrote, government investment in small business will drive the telecommunications and related industries forward. This will work in tandem with investments from companies like Microsoft (MSFT) and AT&T (T) in new technologies to enhance their services and compete in the market. Here are a few things to watch out for in the coming weeks.
Akamai Technologies
Akamai Technologies (AKAM) is an industry leader in all things Internet related. Whether it is equipping small businesses with faster networks or providing large clients—among them, Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN)—with developmental technologies, Akamai is consistently on the cutting edge. Even as it hovers around $26 a share, a high point over the past year, look for this stock to take off as the aforementioned industry leaders dial up support for their innovative products.
InterNAP Network Services
Along the same lines, InterNAP Network Services (INAP) provides businesses, including small ones, with technical support and technology solutions. The company’s strong partnership with Adobe (ADBE) and current uptrend make it a smart choice for investors eyeing cheaper stocks (it ended Wednesday under $5 a share). It is outpacing its 50-day and 200-day moving averages, so now may be the time to add it to your portfolio.
Research in Motion Limited
AT&T (T) will prove to be a winner in the coming months for several reasons. Its continued partnership with Apple (AAPL) keeps the company from falling behind in its product line and overall attraction to consumers. However, if you’re looking to benefit from the bump that telecommunications will receive, look to its partnership with Research in Motion Limited (RIMM). This company is behind BlackBerry, which is also carried by the other major service providers. Small businesses are going to grow as the economy recovers, and many predict that Friday’s job numbers will be promising. As this happens, telecommunications naturally follows the growth of small business. Research in Motion is an industry leader, so pay close attention to this one.
Overall, examining the market trends in the tech industry will be essential to any portfolio’s success in the coming months. Many may be quick to jump on the big company bandwagons, but looking lower on the food chain can prove profitable.
This article is also featured on TheStreet.com's Undergraduate Investor Blog and can be found here.
Be sure to check back each week for the latest on the markets at undergraduateinvestor.com.
