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Quarter-End Insights

Our Outlook for Tech Stocks

Japan's crisis introduces near-term uncertainty.

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  • Japan's crisis will create short-term disruption for the technology supply chain and add a near-term layer of uncertainty across most industries.
     
  • Regardless of near-term fallout from Japan, high-quality technology firms with global reach will generate significant free cash flows in 2011. As cash balances grow, we expect M&A activity to remain fairly high.
     
  • Given the geopolitical uncertainties and generally full valuations, we prefer financially strong firms with solid competitive positions.

Grady Burkett does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.