After Apple Inc. (NASDAQ:AAPL) reported its most recent quarterly performance, some investors and observers alike have regained confidence in the company’s stock. In an interview on Bloomberg Television, Howard Ward was asked whether this confidence in the iPhone maker will translate to more investors and observers also gaining confidence in other names in the technology sector.
According to the GAMCO Investors chief investment officer of growth equities, this is already happening in the industry.
“I think it is actually very much happening. The technology stocks [are being uplifted by this including]the big ugly ones. Microsoft was given up for dead at $27 a couple of years ago. It has almost doubled. Apple was given up for dead at $380 a couple of years ago. IBM was given up for dead. Even IBM, at less than 10 times earnings, is showing some strength. Intel, a perfect example. [It is] a company that was given up for dead at $20 and [now]it’s in the low $30s,” he said.
Nonetheless, Ward was then asked whether this is money finding its way to Apple Inc. (NASDAQ:AAPL) and other technology names because people do not know where else to put their money, or is it money going to these companies’ stocks because investors see an upside to these companies. According to Howard, prices of stocks in these companies now reflect expectations.
“First of all, these stocks became unloved and cheap. Expectations became very low. The bar was reduced. These companies have very entrenched positions in the American economy whether it’s a Microsoft or an Intel or an Apple. These are not small companies and they are not easy to compete with. They have managed themselves for the better. Their businesses and fundamentals are improving. The stock prices are reflecting better expectations for them now in the future,” Howard explained.
See the video below where Apple Inc. (NASDAQ:AAPL) was also compared to new technology companies like Facebook Inc (NASDAQ:FB).