Corporate IT spending is going to be one of the prime drivers of the tech rally in 2010, said Paul Wick, portfolio manager at Seligman Communications & Information Fund. He shared his insight and stock picks.
“A large number of technology companies benefit from [corporate spending]—software, hardware, storage—we’re already seeing it right now because demand has been better than expected for the last couple of quarters,” Wick told CNBC.
“We’re certainly seeing it in the semiconductor industry. Pretty much every semiconductor company has reported upside results in the last 4 to 5 months.”
Wick said factors such as increasing consumer demand in Asia will also help drive the tech sector rally.
“We’re going to have a replay of what happened in 2003,” he said. “2003 was a very up year following a very nasty downturn in 2000 to 2002.”
However, Wick warned that government intervention in the economy and health care reform can increase uncertainty and may deter tech companies from spending and hiring.
“Tax increases that are likely to take effect next year and possible further tax increases could put a damper on the economy,” he added.
And "it looked like the dollar was going to be a tailwind to a lot of technology companies, but as the dollar strengthens, that will turn into a headwind again.”
Wick’s Top Picks:
More Tech/Market Views:
- Oracle Profit, Sales Easily Beat Wall St. Expectations
- 6 Tech Stocks to Ride 2010 Rally: Manager
- Markets Will Rally — Buy These 8 Stocks: Strategist
CNBC Data Pages:
No immediate information was available for Wick or his firm.