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Trading Tech: Google, IBM, Microsoft

Thursday, 18 Apr 2013 | 1:21 PM ET

Shares of IBM into quarterly earnings should provide an important tell, OptionMonster's Jon Najarian said Thursday.

"IBM is the stock for the S&P 500," he said. "Not for tech, but for the S&P 500."

Google, IBM and Microsoft report earnings after the closing bell.

On CNBC's "Fast Money," Josh Brown of Fusion Analytics disagreed about IBM.

"I don't think they're a great bellwether," he said, adding that on average it beats earnings by 2 percent, followed by its stock dropping 2 percent a week later.

"Truthfully, there's not much to get excited about here," Brown said. "It's a 0 percent revenue growth rate. They've actually been missing on the top line."

TheStreet CIO Stephanie Link interjected.

"You don't pay for this company for revenue, though," she said. "You never have. It's double-digit earnings grower because they have other things. Fifty percent of their business is recurring revenue. It's because they're buying back a ton of stock, and they're cutting a lot of costs. And also they're in the process of shifting from this commodity hardware business – PCs – into software services, security, big data."

Regarding Microsoft, Link said, "At least they use their cash."

But Google shares could be worth buying after a pullback, she added.

"That stock's very volatile, and I'm still waiting to see some of their metrics like cost per click improve," Link said.

Rosecliff Capital's Mike Murphy had a favorite among the three tech names.

"If I had to buy one of these into the earnings report, it would definitely be Microsoft," he said, adding that the negative news was already priced in.

"There's no reason to jump into Google before the earnings, and the same thing could be said for IBM," Murphy added. "Microsoft, I think, has the most upside of these names going into the earnings report."

Trader disclosure: On April 18, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long WFC; Josh Brown is long XLU; Josh Brown is long TLT; Josh Brown is long TGT; Josh Brown is long EBAY; Josh Brown is long IEO; Jon Najarian is long FB PUTS; Jon Najarian is long VXX CALLS; Jon Najarian is long FXI PUTS; Jon Najarian is long FDO CALLS; Jon Najarian is long FDO; Jon Najarian is long TXN PUTS; Mike Murphy is long AAPL; Mike Murphy is long BAC; Mike Murphy is long UNH; Mike Murphy is long TOL; Mike Murphy is long IP; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long CSCO; Stephanie Link is long IBM; Stephanie Link is long EMC; Stephanie Link is long MRK.

  Price   Change %Change
IBM
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S&P 500
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GOOGL
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MSFT
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