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The technology sector has long been a high risk, high reward area for investors. Stocks within this sector are driven largely by new developments and innovation. In this article, I will hone in on three technology giants that are making moves to increase profitability and stay ahead of the competition. While Microsoft (NASDAQ:MSFT) is focusing on Bing, along with a new advertising service patent, IBM (NYSE:IBM) is finalizing its acquisition of Tealeaf Technology. At the same time, Cisco (NASDAQ:CSCO) is making moves to become a bigger player in the cloud computing market, while Oracle (NYSE:ORCL) recently unveiled its Oracle Retail Customer Analytics, which will help its clients drive revenue growth. I will discuss each new development and the potential impacts it could have on these three stocks from an investment standpoint.

With its impressive market cap of $256.98 billion, Microsoft has seen quarterly revenue growth of 6% year on year. Microsoft's Bing may be making gains on competitor Google. Recent reports indicate that grew its market share from 12.29% in May of 2011 to 13.17% in May of 2012. At the same time, Apple has decided to change things up, as it plans to stop using Google Maps for its iOS 6 Maps application. This has led to some speculation about which company will take over, but recent developments point to the possibility that Microsoft's Bing Maps will be used. An anonymous person has leaked several iOS 6 beta screenshots, and some of the maps have images belonging to Microsoft. There has been no real confirmation of this, so it is all just speculation at the moment. If this continues, however, it will help Microsoft's Bing become a more powerful player in the market, which will be bad for Google's stock, but good for Microsoft's stock.

Another partnership will be beneficial to Microsoft as well, and there is less speculation involved in this one. The government of Assam has signed a deal with Microsoft to improve the use of information and communication technology in schools. Technology is moving to the forefront of most fields, and education is no exception to this trend. Microsoft is giving itself a better reputation by helping with this initiative, and it is also continuing to establish a strong presence in this part of the industry. As a result of this deal, Microsoft's stock should be in a better position, even if this is a more minor event.

Microsoft is not immune to more negative news, however, as it has recently discovered and patched several major bugs in Internet Explorer. Microsoft made seven security updates, and it ranked three of them as "critical," which is the most severe ranking it has. It is reassuring that the company is being so proactive about this, but such a mass of severe threats should have never built up. I have often heard people questioning the security of Internet Explorer, and I do not think the existence of all these bugs will do much good to its reputation. The patch will help, but I still expect this to have a slightly negative effect on Microsoft's stock.

Some other negative news may be taking a positive turn though. Following Google's call to ban Microsoft from importing its Xbox 360 gaming console, many in the tech industry have sided with Microsoft. This ban would harm more than just Microsoft, so many companies are stepping up to defend Microsoft. IBM, for example, makes chips for the Xbox system, and would suffer from this ban. Even the Entertainment Software Association is taking a stance against this ban. With such a large response, I think Microsoft will be able to win this fight against Google. This should help reassure investors and prevent this story from having a negative impact on Microsoft's stock. This is a situation, however, that shareholders should certainly watch closely as things continue to develop.

Microsoft's stock is still in a good place, but the competition seems strong, as several other companies have good reasons to be optimistic as well.

While Oracle has only experienced year on year quarterly revenue growth of 1.3%, the company was recently upgraded to "outperform" by RBC Capital Markets, with a new price target of $36. Part of the reason for the upgrade was likely to do with its recent unveiling of Oracle Retail Customer Analytics, a new program that enables retailers to see what drives customers' buying decisions. This is a big step for Oracle, as it will help retailers increase sales and margins while better understanding buying patterns. The program is part of a group of business intelligence applications designed to give businesses better insight into a live sales environment. If successful, this new program could be a huge boost for Oracle's bottom line and positively impact its stock.

Oracle also recently received a Manufacturing Leaders 100 award for transforming its Sun global value chain. The company announced that twenty-four of its customers received awards for transformational projects that utilized Oracle applications and technology. This will all help to further build up Oracle's reputation as a strong company in the tech industry, and this also shows its connection to innovation and progress. This is massively good press and should benefit Oracle stock as well.

IBM, with a market cap of $225.60 billion, has seen year on year quarter revenue growth of .3%. The company also has been in the news for positive reasons, as it has completed its acquisition of Tealeaf Technology. Tealeaf, at one point, had over 450 customers around the globe in its portfolio. This acquisition will help IBM continue with its Smarter Commerce initiative, as Tealeaf is able to provide

a full suite of customer experience management software, which analyzes interactions on websites and mobile devices.

This shows the company expanding in consistent ways in relation to business technology, which is becoming increasingly important in the world today. I believe this will help IBM maintain strength in the industry and should have positive effects on the stock.

Cisco has seen year on year quarterly revenue growth of 6.6%. The company is also in a decent position, as it has recently held its Cisco Live event. At the event, it announced that it is moving forward in the cloud industry through its new Cloud Connected Solution. Some of the many improvements in this service will be its better accessibility, availability, and security. Following the event, the company has also announced that it is creating a new software developing platform called the Cisco Open Network Environment. Both of these show the company moving at a fast pace, becoming an even bigger player in the tech industry. With profit margins of 16.14% [TTM], I expect Cisco's new announcements to push its stock higher in the near term.

There are many companies that are doing well at the moment in the tech industry, and I still believe that Microsoft is one of the stronger players. It is establishing beneficial partnerships, and is moving forward in the field of advertising. The problems with Internet Explorer will soon be forgotten due to the patches, and there is much support for Microsoft with the issue of the importation ban. These negative stories, therefore, are rather minor. As a result, I believe that Microsoft's stock is a good investment and should be rising in the future.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 4 Tech Stocks To Buy Now For Gains By 2013