- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
IDG News Service - Thanks to optimism about the U.S. economy and some good signs from tech vendor financial reports, IT companies Friday ended their best quarter on the markets since the end of 2000, when the dot-com bubble burst and shares plunged.
In aggregate, tech shares Friday slipped a bit, but not nearly enough to put a damper on the quarter as a whole. The tech-heavy Nasdaq ended Friday at 3,091.57, down 3.79 points for the day but at its best level since the fourth quarter of 2000.
Nasdaq computer stocks are up 24 percent since the beginning of the year. Nasdaq telecom stocks are up about 11 percent for the year. Stocks in the tech, media and telecom market segment were up about 10 percent on the New York Stock Exchange, the best-performing sector on that exchange outside of financials, which were up about 17 percent.
Compared to the Dow Jones Industrials Index, up by about 8 percent, computer shares are doing very well.
General optimism about the economy is part of the upbeat mood. On Thursday, for example, the U.S. Department of Labor said that last week the number of people seeking jobless benefits for the first time had dropped to a four-year low.
Good news on the sales and profit front is adding an extra dose of confidence to IT. On the down side, not all IT vendors have performed equally well, and some analysts have suggested that Apple's phenomenal growth may be skewing overall statistics.
Few companies of Apple's size have been able to grow as rapidly as it has recently. In its last quarterly earnings report, Apple said net income increased 118 percent from a year earlier, to US$13.06 billion. Certainly, Apple's anomalous expansion has a huge impact on overall market data.
Excluding Apple's results from the broad S&P 500 index of share prices, for example, would take the index down from a 6.1 percent to a 3.0 percent overall share price growth this year, according to data from market analysis firm Factset. Taking Apple profits out of the equation, profits for the index go from about break-even to a decline of 1.6 percent. Apple is traded on the Nasdaq, so it affects aggregate numbers for that specific exchange, often associated with tech since so many IT companies are listed there.
However, recent results show positive signs for other tech companies, especially in the enterprise tech market.
On Thursday, Red Hat said it had become the first open-source company to hit $1 billion in sales. For the three months ending Feb. 29, revenue increased 25 percent year over year to $1.13 billion. Profit rose to $146.6 million from $107.3 million.
The sales figure is a vote of confidence from the corporate IT community in open-source software, as well as the open-source business model, since no user wants a supplier that is likely to go out of business anytime soon.
"The open source technologies which we provide are being selected by more customers every day as they re-architect the infrastructure of their data centers for greater efficiency, agility and cloud enablement," said CEO Jim Whitehurst in a statement.