Stuart O'Gorman Feels Technology Will Outperform

In an article on CNBC, Stuart O'Gorman, director of technology investment at Henderson Global Investors, said that technology stocks will prove to be ‘very cash generative’ and will outperform the general market over the next 52 weeks. "In the most recent fall we had, tech outperformed the market...we seem to be outperforming both in falling and rising markets," Stuart pointed out.

Investors incorrectly perceive technology to be a high-risk sector, although it is the "only sector with positive net cash". If traders analyze top ten technology stocks, they will find that these companies have a total cash of about a quarter of a trillion dollars on their balance sheets, with the reserves rising by 40% over the last year.

The technology sector promises significant growth in the future, boosted by high ‘pent up demand.’ "You can now buy a handset for $10 in China, but people are still making money selling them," said the expert. "It just means the addressable markets are much bigger."

As compared to the market, the valuation of technology stocks is the cheapest in 20 years and as such is the catalyst driving the demand for these companies. The sector derives a substantial portion of demand ‘from a rebound in corporate IT spending as companies search for cost savings in electricity bills, real estate and reducing IT head count,’ O'Gorman specified.

Some of the high performing technology stocks at 1:43 pm are Novell Inc (NASDAQ: NOVL), which was up 4.24% to $5.66, Dell Inc (NASDAQ: DELL) which climbed 2.60% to $15.78 and Apple Inc (NASDAQ: AAPL) which had gained 2.24% to $259.68 so far today.

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