Our outlook for tech & communication services stocks

Investors should remain selective amid a generally uninspiring marketplace, while keeping an eye on secular themes.

Peter Wahlstrom 29 June, 2013 | 3:11AM
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Investors should remain selective amid a generally uninspiring marketplace, while keeping an eye on secular themes
A revised U.S. telecom landscape continues to take shape, but plenty of uncertainty remains.
The smartphone and tablet industries continue to thrive, and Apple and Samsung remain at the head of the pack, gaining share.

Second-quarter results across the technology and telecom sectors were generally muted if not unremarkable, as a relatively benign, if somewhat sluggish global macroeconomic environment provided a reasonably good backdrop for evaluating firms' "mid-cycle" earnings power. Key secular themes of pervasive mobility, social Internet and cloud computing continue to drive change throughout the technology and telecom sectors, while emerging trends such as big data and machine-to-machine computing will become increasingly important over time. As firms across the sector shift their portfolios to benefit from these trends, we believe that companies with the strongest competitive advantages -- wide and narrow moats -- are best positioned to capitalize on change over the longer term.

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About Author

Peter Wahlstrom

Peter Wahlstrom  Peter Wahlstrom, CFA, is director of technology, media, and telecom equity research for Morningstar.

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