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These oversized tech companies are more exciting than Apple, says ex-BlackRock boss



Relief over well-received results from Apple and Facebook may not be enough to fuel another S&P 500 disc on Thursday, as rumblings on the trade front get in the way.

These big tech names are an integral part of today's conversation from BlueBox Asset Management co-portfolio manager William De Gale who says it's time for investors to look past household names to companies ahead of the next big tech the shift – to connect computers to the real world.

"I want to own companies that are going to be dramatically better than five years from today," the former BlackRock technology fund manager told MarketWatch in an interview.

De Gale puts out a couple of reasons why he is less concerned about Apple: stocks have been underperforming for many years (see the table below), and there really is no new product to dazzle investors.

Bloomberg, BlueBox Asset Management [19659006] In the Global Technology Fund he manages, he offers alternatives such as decades-old Texas Instruments

TXN, -1.34% .

"It makes integrated circuits a control, a very small, very cheap chip that controls the flow around a circuit, and that basically lets a battery last as long as possible," said De Gale, who adds that Texas Instruments has very little competition.

Then there are EPAM systems

EPAM, + 0.36% ,

a software services company that made Fortunes 100 list of fastest growing companies for 2019. "They write software for companies that can't do it themselves, mainly non-tech companies," in a sense a "sophisticated niche business," he says.

Also Cadence Design Systems

CDNS, + 1.47% ,

like writing software to help chip designers design chips. De Gale says it stands out among the competition – Synopsys

SNPS, + 0.68%

and Mentor Graphics – purchased in 2016 by Germany's Siemens

SIE, -0.42%

Market

Dow

YM00, -0.21% ,

S&P 500

ES00, -0.24%

and Nasdaq futures

NQ00, -0.14%

slips after a report by Chinese officials casts doubt on a viable US trade deal that could be signed. Europe shares

SXXP, -0.24%

also slides, and the Shanghai Composite

SHCOMP, -0.35%

fell after China production reached an 8-month low.

The chart

Our chart of the day by Citigroup analyst Ephrem Ravi, highlights how palladium prices

PAZ19, -1.19% ,

a key component used in electronics and new technologies has risen this year as the metal draws on macroeconomic concerns.

Citi

Ravi sees that palladium reaches $ 2,000 an ounce in the next three months from around $ 1,782 currently on an improved global economic outlook. But in the longer term, US-China trade tensions pose a risk to the metal, he says.

Buzz
Reuters

Apple

AAPL, -0.01%

Stocks are climbing on positive earnings and a holiday forecast, even though iPhone earnings fell again. In the meantime, the invitation program is booming.

Facebook

FB, -0.56%

stock increases on a leap in income. On the revenue side, CEO Mark Zuckeberg jumped in defense of political ads and affected antitrust probes.

Thursday's earnings include chemical giant DuPont

DD, -2.60% ,

food processing group Archer Daniels

ADM, -2.36%

and the food group Kraft Heinz

KHC, + 1.28%

.

Fiat Chrysler

FCAU, + 5.27%

FCA, + 8.52%

stocks are climbing, but those from PSA Peugeot

UG, -12.55%

is down after the two companies announced a merger 50/50.

The Economy

Weekly unemployment claims, consumer spending and the index of Chicago purchasing executives are all ahead.

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