As a matter of fact, the major software players like Microsoft, Cisco, Nokia, RIM, EBay and even Amazon are relying on emerging market growth and a week dollar to stay afloat. As emerging markets begin to correct and as the dollar strengthens, you don't want to be in these stocks. Other high-fliers like Intuitive Surgical and First Solar have seen extraordinary gains on the basis of quick growth. The growth is the sectors in which these companies operate cannot be sustained and to assume that the can is foolhardy. You will get your head handed to you on a plate - they smell like Lucent or Nortel.
If you are going to invest in technology, you want to invest in some companies that have strong growth prospects and reasonable valuations. Stick with the real powerhouses here, not those that are derivative plays on something that some unknown analyst on the the Nightly Business Report is pushing (some guy last night was pushing Affametrix - avoid it).
Here are the four stocks:
1) Apple - Just an unbelievable company these days which has three game changing franchises between the Ipod, the iPhone and their computer business. The company seems destined to go back to 200 and to becoming the largest company in the world within a very short time. Stop kicking yourself about not having bought it earlier and buy it now.
2) Google - Clearly, the undisputed leader in web advertising and a gargantuan beneficiary of what is happening these days across advertising in general.
3) VMWare - The clear leader in virtualization which is the next wave in corporate security and computing memory enhancements.
4) Adobe - The clear leader in web publishing software, which is an industry which will continue to grow quickly and above long-term concensus estimates.
These stocks may fall when tech collapses over the summer, but these will be long term winners, and if you start picking and playing with other things, you are likely to happen on the next Lucent or Nortel.
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