What Does an Obama Presidency Mean for Tech?

S&P analysts look at how the President-elect's policies could affect the sector. Among the potential winners: Google and HP

By Lisa Sanders From Standard & Poor's Equity Research

Before he became President-elect of the U.S., Barack Obama, who ran on a platform of change, pledged a number of things. In terms of technology, he vowed on his Web site to "ensure an open Internet, create a transparent and connected democracy, encourage a modern communications infrastructure, improve America's competitiveness, and employ science and technology to solve our nation's most pressing problems."

But what does all that really mean? Scott Kessler, head of Standard & Poor's information technology equity research group, believes that Obama's plans could be relatively beneficial for technology companies in the U.S.

Kessler, who recently watched Obama talking about technology-related proposals in an online video, provided some more perspective. In Kessler's view, Obama means to make the research and development tax credit permanent; to provide immigration reform to enable U.S. companies to hire and retain workers more easily; to enforce antitrust laws better; to provide universal broadband access to individuals; to provide broadband access to schools, libraries, and hospitals; to unleash wireless spectrum for a variety of purposes, including connectivity; to put more government information online and to provide better access to it; to promote electronic medical records; and to invest in clean and renewable energy (like solar).

Reduced M&A?

"U.S. firms large and small would benefit from the R&D tax credit and immigration reform related to employment,& says Kessler. However, "better enforcement of antitrust laws probably means less M&A, which on a net basis is probably not so good for larger firms and neutral for small companies that would be more accounted for but less likely to receive takeover offers."

Though Kessler says it makes sense to provide more broadband access and online information, he's not sure how an expansion would be financed. But he thinks the plan is likely positive to neutral for telecom carriers and equipment firms, and positive for Internet companies.

President-elect Obama's campaign priorities included providing broadband access to all Americans through wire-line and wireless connections. "We believe that this could spur long-term investments by telecom carriers such as AT&T (T) in metropolitan markets and Frontier Communications (FTR) in rural markets," says Todd Rosenbluth, head of S&P's telecommunications equity research group. "Greater universal service funding for broadband, if passed, may lead to cash flow gains for the telecoms, while increased regulation and mandated competition may offset those gains."

Kessler believes these technology stocks are well-positioned to benefit from potential Obama Administration policies: Applied Materials (AMAT), Hewlett-Packard (HPQ), IBM (IBM), and Google (GOOG).

Sanders is a reporter for Standard & Poor's Global Editorial Operations .