3 Top Tech Stocks
Big tech is not dead and this trio prove that, notes John Persinos of Personal Finance.
As market tumult spooks investors, it's more important than ever to stay focused on underlying fundamentals. That's why we continue to like the technology sector, which remains high in liquidity, low on debt and long on prospects.
Cash reserves are crucial for tech companies, because of their need to invest in the research and development (R&D) that spawns new products and future growth.
According to research firm IC Insights, spending on R&D by semi-conductor companies worldwide is expected to grow 10% in 2012 to a record-high $53.4 billion, compared to $48.7 billion in 2011. Meanwhile, connectivity requirements and smartphone use continue to burgeon, especially in emerging markets.
A sizable cash hoard also provides a cushion during market downturns. Consequently, the right technology stocks offer a combination of growth and safety, for investors anxious about today's market conditions but still eager to invest.
That said, tepid economic growth in the US and recessions in the debt-plagued Eurozone have buffeted the tech sector this year. Research firm International Data Corp. estimates that the worldwide PC market contracted 8.6% in the third quarter.