TECHNOLOGY STOCKS ARE LOOKING UP AS ALL EYES TURN TO THE CLOUD
NASDAQ is the second largest exchange in the US and the world, second only to the New York Stock Exchange (NYSE). The Nasdaq is known for technology and was the exchange of choice when technology start-ups were looking to list in the tech boom (and subsequent bubble) of the late 1990s. It has retained its focus on technology and for investors interested in that sector, the Nasdaq continues to offer plenty of choice.
The fate of the technology bubble is well documented – following the collapse of tech shares in the late 1990s and early 2000s, the Nasdaq Composite Index fell by almost 40 per cent in 2000. To quote Jim Rogers, “nearly all bull markets end in bubbles” and the Nasdaq bull market certainly bore that out.
NEW CONFIDENCE
Since that shakeout however, investor confidence in technology has rallied once again and there is currently plenty of activity in the sector that could attract investor attention. Step up, cloud computing. Set to revolutionise computing for individuals and businesses alike, outsourced computing makes almost everything cheaper, faster and easier. From an investment perspective, there are companies well-positioned to benefit hugely and so it follows that there are investment opportunities.
CLOUD PLAYERS
There are plenty of well known players getting involved. Apple (AAPL) recently launched iCloud, its venture into the world of cloud, and NetFlix (NFLX) already uses the technology to stream content straight to personal televisions and computers.
Other big names in cloud technology include Microsoft (MSFT) and Amazon (AMZN). In fact, Amazon is already renting cloud capacity to users.
The key, as with all innovative developments, is to be careful not to overpay on stocks. Cloud is still at a relatively young stage and it is important to take caution over where and when you invest. Look for companies with a global presence and stay strict with yourself on valuations. Crucially, as always, you should do your own research.