Published March 07, 2014
In a FOX Business exclusive, JPMorgan Chase (JPM) says tech investors should expect multiple $5 billion to $10 billion M&A deals this year, with Microsoft (MSFT), Oracle (ORCL), Hewlett-Packard (HPQ) and IBM (IBM) leading the way.
This old tech sector has been under pressure recently with investors opting for hot names like Facebook (FB), Twitter (TWTR) and Amazon.com (AMZN), but JPMorgan IT hardware analyst Mark Moskowitz says he expects to see a resurgence this year with innovation and investor interest.
Moskowitz says investor psychology towards these more traditional tech stocks is changing. Nominal top-line growth is now all investors need to get excited – a major shift from just 10 years ago – and Hewlett-Packard is a name investors should be watching.
The companies Moskowitz calls “legacy hardware” have also begun to pay regular dividends and buy back stock in recent years, but the problem, according to Moskowitz, is capital return programs can only keep investors’ interest for so long. It’s up to growth and innovation to keep the markets happy.
Wearable Tech Fad
Something Moskowitz is also watching is wearable technology – made famous by Samsung’s Galaxy Gear, Google’s Glass and Apple’s (AAPL) much-anticipated iWatch. But he says wearable tech is a fad and will pass. Instead, the real future is sensors that monitor everything from cars, traffic, jet engines and factories.
Moskowitz goes on to say the big tech companies, like IBM and Oracle, are the only ones positioned to not only store the data generated by these sensors, but also analyze this “big data” into usable information.