Adam Adelman
Adam Adelman
companies information managers software sold spend technology
Software companies have sold off aggressively but some information technology managers have indicated a willingness to spend in that area.
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A quicker-than-expected recovery in capital expenditure spending will probably be the biggest catalyst, if one occurs at all.
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The market will take any good news it can wrap its arms around so if Dell offers some encouragement that might mark a short-term bottom for tech. But it has to say some positive things about the spending environment, which isn't likely since there is no incentive to be overly optimistic.
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We're already starting to see valuations get stretched again. It's not unlikely that we can get back close to 1,700 on the Nasdaq, but I don't think that's necessarily justifiable. That's just a function of trading psychology in the short run.
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Juniper, Foundry and Extreme will carve out a little niche for themselves, but their long-term growth potential is restricted by Cisco.
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Valuations remain a little stretched, and we could see some further weakness into the early part of the year.
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Potential customers have more faith and confidence in the financial health of IBM.
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Share buybacks are just a necessary financial function in modern markets, something you have to do almost regardless of stock price. It's almost like paying your bills.
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When you consider alternatives such as Linux, arguments in favor of Windows are not as appealing. This worm was basically an exercise to show off the flaws in Microsoft security and Microsoft didn't fare too well.
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I'm a little surprised the market isn't acting more negatively. This does expose a real threat and Microsoft has always had the problem of shoring up confidence regarding its security flaws.
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This uncertainty about what Microsoft is going to do with the cash has been hanging over the stock for a couple of years. A buyback would be a signal that management is optimistic with the price of its own stock.
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You can make a fair argument that they were undervalued. Some were priced for bankruptcy so it's not that surprising that we've seen this bounce.
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It'll take another round of earnings to confirm some of the optimism that's been going around. And I don't know that I would say all the news was necessarily good. A lot of companies beat much-lowered expectations and didn't necessarily have rosy outlooks.
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A lot of investors have been conditioned to expect surprises on the upside from tech companies so when they see companies just meet expectations they get nervous.