Cisco's (CSCO) CEO John Chambers "put the fear of God" into tech investors when he warned his company was seeing softening tech spending among domestic enterprise customers. Barron's says the ensuing drop was likely overdone, and notes some bargains in what promises to be a 2008 of "solid but uninspiring" tech sector growth.
Pip Coburn of Coburn Venture Partners called the market's post-Cisco selloff "psychotic," noting the company earns less than 5% of its revenue from U.S. financial customers. He stocked up on CSCO and Oracle (ORCL) which sold off on the news. He also likes Adobe (ADBE), Nintendo (OTCPK:NTDOY), engineering software vendor Ansys (ANSS), 3D printer maker Stratasys (SSYS) and high-end GPS developer Trimble (TRMB). He's short New York Times (NYT) and troubled tech-companies Motorola (MOT), eBay (EBAY), Alcatel-Lucent (ALU), Interpublic (IPG) and CNET (CNET).
Tech investor Integral Capital Partners likes Google (GOOG) and Yahoo (YHOO). Integral's Chip Morris likes stocks "people have thrown away or ignored" such as InterNAP Network Services (INAP) and Sonus Networks (SONS). He also likes smartphone stocks Palm (PALM) and Research In Motion (RIMM).
Portfolio manager Paul Wick expects Cisco to grow 16-17% year-over-year. He also likes enterprise storage play Network Appliance (NTAP), and "screaming bargains" Mentor Graphics (MENT), which makes electronic-design automation software, and ON Semiconductor (ONNN). Wick says a floundering U.S. economy is less damaging to tech than to other sectors.
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