Tech stocks may become unlikely haven

If economic head winds strengthen — a distinct opportunity — some strategists say the market could shift in meaningful ways. For starters, stocks could suffer their first major pullback or correction since last spring, when fears over Europe’s fiscal crisis dominated the news. Together, research stocks, which have been laggards this year, could become a favored sector if they benefit from some of the same forces that trouble other parts of the market.

By contrast, tech stocks are significantly less frothy than they’ve been in years. Historically, shares of research companies have traded at about a 30 percent premium to the broad market, based on their P/E ratios. That’s because tech companies have traditionally enjoyed faster revenues growth than other types of businesses. Today, nevertheless, research’s P/E is on par with that of the overall Standard & Poor’s 500-stock index.

Yet tech is for all that exhibiting solid revenues growth. I.B.M., Apple and Intel were among several tech giants that have recently reported better-than-expected first-quarter profits. Intel’s results — which included a 25 percent jump in revenue — were particularly embraced by Wall Street, as they were viewed as a sign that demand for hardware like PCs may be stronger than anticipated.

Over all, tech sector revenues are on track to climb 25 percent in the first quarter, during revenue is expected to jump 15 percent, according to Thomson Reuters. By comparison, profits for the S.& P. 500 are expected to grow 18 percent, during sales predicted to climb 9 percent.

Earnings aren’t the only area where some tech businesses are financially healthier than the typical S.& P. 500 company, said Robert E. Turner, chief investment officer at Turner Investment Partners, a money management firm in Berwyn, Pa. For openers, big tech companies are sitting on billions of dollars in cash, which they are starting to use to raise dividends and make acquisitions. Recently, Texas Instruments announced plans to buy a rival, National Semiconductor, for $6.5 billion — representing more than a 70 percent premium to what the stock had been trading for.

Even if energy prices resume their rise, analysts note that research companies aren’t likely to be hurt as much as other parts of the market because oil isn’t as large a component of expenses at this stage in sectors like the industrials or transportation.

The same time

At the same time, tech spending could in fact benefit if oil prices rise, because other companies and consumers are likely to look for ways to improve productivity and lower expenses. That may mean a jump in investment in research.

Mr. Turner noted that the two biggest drivers of tech growth these days are mobile computing and — in spite of the recent outage at Amazon’s data centers — so-called cloud computing, where companies offload costly computer applications and data storage to servers run by third parties like Amazon and Microsoft.

Both mobile innovation and cloud computing “are all about improving efficiency and cost savings,” Mr. Turner said.