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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.

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