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Corporate Refresh Will Boost These Tech Firms: Strategists


Oracle reported a profit that topped Street expectations and Apple shares hit a new record high. What is driving tech at this stage and does it have more room to run? Roger Kay, president and founder of Endpoint Technologies, and Rob Sanderson, director of research at ABR Investment Strategy, shared their sector outlooks.

“Apple’s so strong because it’s a great company—it keeps doing well and we’re on the eve of the introduction of the iPad and there’s been a lot of interest,” Kay told CNBC.

Kay said Apple’s iPad will be able to “easily” double the size of the current tablet market and will change the way consumers view the product category.

Meanwhile, Kay said the most important sign for Oracle is corporate spending that has started to return.

“We’re seeing a very broad basis—not only in Oracle, but Qualcomm on the Silicon end and Best Buy on the retail end—that visibility is looking brighter all the time,” he commented. “You’re going to see more of that corporate buying into 2011.”

A 'Global Uptick'

In the meantime, Sanderson said there’s a lot of strength in demand for component suppliers in Asia.

“It’s very encouraging to see at this time of the year—a very non-typical seasonality—and the only explanation we can see is benefiting from a global uptick in economic conditions,” he said.

Sanderson said Oracle’s positive earnings is a bullish indicator and when the corporate spending recovery does come around, it will “add another leg to the growth” to the company.

“If you’re looking for large-cap plays, you’ve got to go into Intel ,” he added. “There’s going to be a very strong quarter coming up and they’ve got good visibility for a few, and if you do see that corporate spending recovery, you’ve got another leg of growth in the backhalf of the year.”

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No immediate information was available for Kay or Sanderson.