The trajectory of Apple Inc. (NASDAQ/AAPL) helps determine the movement of the NASDAQ. When Apple lost seven percent in five sessions from April 10 to below $600.00 on April 16, the NASDAQ lost some ground and breached support at 3,000.
Contrary to what some nervous traders believe, Apple still has some shine as an investment opportunity. I don’t believe Apple will become a trillion-dollar company anytime soon as some of the more optimistic investors believe, but I do think the maker of the “iPhone” and “iPad” will continue to rule the tech space as a leading investment opportunity. The average one-year target price on Apple is $674.00, with a low of $270.00 and high of $910.00.
Technology stocks were the second top gainer in the fourth quarter, with earnings growth of 16.8%. Growth in the first quarter is not expected to be as high, but I feel the sector will be one of the top picks for an investment opportunity.
Good earnings growth has provided the positive catalyst for the recent buying. So far, 32 S&P 500 companies have reported with an encouraging 75%, beating estimates, which is well above the Q4 results of about 67%.
Technology stocks have largely delivered.
Yahoo! Inc. (NASDAQ/YHOO) managed to beat on revenues and earnings per share EPS by $0.06 per diluted share. The company is speculated to be a potential takeover target in whole or part, which makes the stock an intriguing investment opportunity.
International Business Machines Corporation (NYSE/IBM) fell short on revenues, but beat on EPS along with raising its annual EPS outlook.
Intel Corporation (NASDAQ/INTC) beat on revenues and EPS.
Google Inc. (NASDAQ/GOOG) beat on its Q1 EPS, but came up in-line on revenues. Google also announced a two-for-one stock split, which could jump start the stock. The company will battle it out with Facebook when it debuts in May as the premier Internet investment opportunity.
I continue to firmly feel that technology stocks will be the place to be as the best investment opportunity for growth investors going forward.
The NASDAQ remains the market leader in 2012, up nearly 17%. In late 2012, I said that technology would be a critical area for investment opportunity, as this sector has provided much of the leadership over the last several years.
I believe the area that will offer the best investment opportunity is that of mobility applications for tablets and smart phones, as users shift away from the more cumbersome personal computers and laptops. Here we have Apple, plus Google with its “Android” phones.
The major chip companies such as Intel will also be an excellent place to stash some capital.
Also take a look at some of the smaller technology stocks that develop solutions for mobile applications, including Synaptics Incorporated (NASDAQ/SYNA), 8×8, Inc. (NASDAQ/EGHT), and Glu Mobile Inc. (NASDAQ/GLUU).
Going back to the glory days of technology investing, I see a good investment opportunity in Microsoft Corporation (NASDAQ/MSFT), which recently traded at a new 52-week high. My optimism relates to the company’s new smartphones in a venture with Nokia Corporation (NYSE/NOK). Microsoft will install its mobile operating system in Nokia smartphones. Trading at around $4.00, Nokia is worth a closer look for the contrarian investor.
Please note that the technology stocks I have mentioned today do not represent buy endorsements, but are just examples of stocks that you may want to look at in technology.
The key to tech investing is to look away from just brand-name stocks; make sure you are diversified, so as to minimize the total portfolio risk and increase your investment opportunity.