Once again Research is following the Stock prices, and now this time it is in the iT Services segment 🙂 IT spending indices continue to build a bottom from which we expect to see more significant improvement in readings ahead.
A greater majority of our panel of IT managers now expect normal or better than normal seasonal spending trends for the second half of the year relative to prior reading. Another early inquiry into 2010 spending expectations also reveals sturdier expectations. Improved readings on spending for software, networking, and higher-value IT services, as well as pent-up demand for computer hardware, add to a more optimistic view of the ongoing recovery.
Goldman Analyst wrote,
Our investment stance continues to shift more offensively as we begin to pass the baton to mid-cycle groups such as software and hardware. We remain positive on a number of early cyclicals such as semis, viewing out performance year to date as more driven by supply-chain dynamics. We now begin to turn our attention to the potential for more demand driven upside.
TCS is their top pick, given its optimal combination of exposure to growth in terms of vertical alignment, geographical exposure and service offerings. We also expect TCS’s investment in Platform BPO could allow for nonlinear growth longer term.