Yes, but not necessarily across the board. Tech has benefited from a dramatic shift in investor sentiment this year, and much of that gain is behind us. Many of the NASDAQ's leading stocks -- Cisco, Microsoft, Dell, Oracle, Sun, Intel -- have bounced back, but they are in relatively mature industries. From here on out, success will depend on investing in the companies that are positioned to take advantage of industry trends where there is real growth.What trends are those?
We're particularly excited about wireless communications. It's not just cell phones, although we do believe we're in the midst of an upgrade cycle for cell-phone handsets in the U.S.
We're also excited about other technologies, including Wi-Fi -- the technologies that make possible high-frequency wireless local-area networks -- and wireless local-loop technology, which permits rapid rollout of service to areas in developing nations that have no wired telephone system in place.
Another promising field is consumer electronics: digital cameras, digital videorecorders such as TiVo (TIVO
), and video games, all of which showed strong growth even through the economic downturn. We expect these areas to continue to do well.What are your favorite companies in those industries?
In wireless infrastructure, UTStarcom (UTSI
) is one of my favorites. The company has had tremendous success selling its wireless-local-phone solutions in China, which is a market still in its infancy. Another company we like is Skyworks Solutions (SWKS
), which is developing next-generation technology for handsets.
On the consumer side, Lexar Media (LEXR
) and SanDisk (SNDK
) are in a position to take advantage of the growth in digital photography, as they're two of the primary suppliers of removable flash memory for these products. Another strong play in this sector is Zoran (ZRAN
), a chipmaker whose products are found in digital cameras and in DVD players and DVD recorders.What company in your fund right now offers the best value to investors?
It's Electronic Arts. The company has a commanding share of the large and fast-growing video-game market. Last year, sales of video-games industrywide exceeded $10 billion and topped movie box-office sales. Over 50% of U.S. households have a game console of some kind, and that's why Electronic Arts can become an entertainment powerhouse.