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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. 


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