Money manager Jim Oberweis said the technology rebound is here to stay, AOL Daily Finance reported.
The performance of tech stocks is not short term, Oberweis said.
“Part of the reason for the downfall of the tech sector was that from 1999 to 2000, stocks were valued so high that investors had priced in perfection, which is something that rarely occurs,’’ he said.
“Over that period, we saw tech stocks lag even though company sales were growing just fine. (Then) over the last two years, corporate investment has been curtailed and after the financial crisis hit, consumers also cut spending. But some of those clouds now appear to be passing.”
Oberweis predicted that the recovery period won’t include any “robust” spending.
“But I do think it will be easier for companies to grow off a much lower base, which is where we are now. Many tech companies are not reflecting this, so I believe that they will surprise on the upside, especially in areas such as network security, routing traffic, and meeting rising bandwidth demands of voice-over-IP and with apps like smart phones,” he said.
Analysts have boosted profit forecasts for tech companies. Earnings are estimated to decrease by 24%, a slight improvement compared with previous guidance of 26% earlier in the quarter, the Wall Street Journal reported.
"My confidence in tech earnings power is a lot higher than my confidence in the earnings power of many industrial companies," said Vitaliy Katsenelson, head of research at Investment Management Associates. "Industrial stocks today are where tech stocks were in 2001."
© 2017 Newsmax. All rights reserved.