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Quarter-End Insights

Our Outlook for Tech & Communication Services Stocks

Though pockets of weakness have emerged, we expect well-positioned tech and telecom firms will continue to prosper.

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  • Semiconductor firms continue to see demand weaken, but we believe the current downturn in the industry--the most cyclical area within tech and communications--is isolated to a few areas and largely the result of specific one-off events.   
  • The M&A environment has heated up again as cash-rich firms, especially in the software industry, look to further augment their capabilities.  
  • We continue to favor larger firms that have the resources to easily weather any bumps in the global economic environment while also taking advantage of opportunities as they arise. 

 

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