I've been pretty optimistic about tech businesses, even during the darkest days of this depress-let.
No question, companies like IBM (NYSE:IBM) and Oracle (NYSE:ORCL) have evaded a lot of the collateral damage of delayed spending that some of their tech brethren have suffered through. Intel's (NASDAQ:INTC) earnings were great yesterday but they definitely have had some choppy quarters that it seems Oracle and others like it have avoided. In the past, I've been long Intel, Microsoft (NASDAQ:MSFT) and the chip/networking companies which provided past gains but also quite a bit of volatility "riding it through."
It seems like even Dell (DELL) is trying to transition itself into a services business as a way to sustain and grow it's more "spot price" oriented and somewhat cruddy computer business.
My question is: are the service dependent business with long term contracts like IBM and Oracle vulnerable to a delayed reaction to the "new normal"? Is the indigestion just a burp...err, quarter away here?
Maybe it's lack of renewals or maybe its renegotiated contracts or maybe it's just no new business to replace the old. IBM reports soon and we may not get indigestion this quarter. But are these companies vulnerable to a "delayed reaction" to a leaner economy down the road? It's pretty hard to advocate a short right now with an avalanche of cash as money comes back into the market.