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4 Tech Titans That Are Lousy Tech Barometers

Investors often watch industry leaders as a barometer for how the rest sector will report. But not all stocks should be considered bellwethers no matter how popular they are with Wall Street.

CNBC’s Dennis Kenale says investors must be very selective when attempting to read the ‘tea leaves” In fact, he says many tech firms can confuse investors more than anything else – that is, if they don’t understand one key fact; not all tech firms provide a read on technology.

You read that right – some big tech names don’t provide a ‘tech tell’.

How’s the possible?

Largely it’s because some companies are far more tethered to other influences than they are the current cycle in technology.

So which names provide the most valuable insights and which don't?

Kneale put together a list for you! First the names that may lead you astray.

Google
Yahoo!
Apple
Amazon

Google, and Yahoo! are ad driven businesses, explains Kneale; they’re not really tech. Apple is a better bellwether for consumers while Amazon is a retailing business – or should we say e-tailing.

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Now here are the better bellwethers; 3 companies that provide valuable insights into tech spending. They are:

Texas Instruments
IBM
Microsoft

Texas Instruments and IBM are solid indicators of the tech industry, Kneale says. “IBM is a corporate customer computer marker and if they have a disappointing top line you have to worry about how businesses are feeling.”

Microsoft, meanwhile, paints an important backdrop for corporate IT spending.


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