Increasing confidence in the economy and a rising stock market could lay the groundwork for a revival in tech-sector mergers and acquisitions as companies embrace cloud technology and pursue game-changing software, particularly for the mobile market.
On the back end of an earnings season that by many accounts could have been worse, tech investors appeared to be in the mood to celebrate on Friday, sending shares of IT companies higher as key stock-market indexes hit milestone highs.
With Apple reporting a decline in profit margins and Samsung consolidating its leadership in the mobile device market, earnings results and market research reports this week point to the ever-increasing importance of smartphones as key to growth in tech.
Some of the biggest names in IT including IBM, Microsoft, Google and Intel reported quarterly earnings this week, revealing a picture of the tech sector that, while not as gloomy as had been feared, is nevertheless mixed.
In a filing to the U.S. Securities and Exchange Commission on Friday, Dell highlighted the dismal financial straits that led to its plan to take the company private, a move that now has some major shareholders in an uproar.
Though IT trailed other sectors as market indices rose to milestone highs this quarter, some bright spots in earnings and market research reports this week indicate continuing confidence that things will go better for tech this year than in 2012.
While U.S. markets have surged lately, with the Dow Jones Industrial Average hitting milestone after milestone in 10 straight days of advances, a relatively modest increase in the value of IT company shares reflects the reality that a rising tide will not lift all boats in the tech sector.
With U.S. markets rallying and the Dow Jones Industrial Average hitting record highs, analysts and industry insiders are expressing a sense of sober confidence, if not exuberance, about the tech sector's prospects for the year.
Even though PC giants Hewlett-Packard and Dell reported significant year-over-year sales declines, tech stocks, buoyed by signs of confidence from other IT vendors, started to rise again Friday after slumping for most of the week.
The growing number of shareholders voicing opposition to Dell's US$24.4 billion plan to go private appears to be putting the company increasingly on the defensive, raising questions about the terms of the deal.
Despite some caution about the fortunes of BlackBerry, Facebook and Apple, solid financial results from tech vendors coupled with positive reports about the economy are boosting confidence in IT, with share prices of computer, consumer electronics and Internet companies rising this week.
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