Outlook 2014: Technology Stocks

Technology companies have fallen behind other developed market stocks this year, as traditional IT products and services consider how to embrace the future

Allianz Global Investors 16 December, 2013 | 2:58PM

This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, Walter Price, Manager of the Allianz RCM Technology Fund, comments on the outlook for the technology sector in 2014.

Equity markets in the developed world have done exceedingly well this year as investors have reacted positively to improving visibility on a number of the economic and political challenges impacting the global economy over the past few years.

The returns in the technology sector have been relatively less spectacular this year as soft sales in the traditional software, hardware, and IT services segments weighed on some of the largest technology companies. We believe there are two reasons for this: increased scrutiny over capital investment and managements are contemplating their transition to on-demand, “cloud” solutions.

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