2 Tech Stocks Ignoring the Market Indecision

After some initial indecision following a Federal Reserve statement on monetary policy, investors followed up with more indecision in an afternoon of four changes in direction for the broader equity indexes. At the end of the day, index investors were largely back where they started. However, two stocks bucked the broader market trend to book some big gains today. Let's take a closer look.

Company

Gain / Loss %

Price

Jabil Circuit (NYSE: JBL  )  6.9% $20.75
Millennial Media (NYSE: MM  )  5.1%  $13.04

Shares of Jabil Circuit, a key supply-chain provider for a variety of tech companies, saw a meaningful move lower in May following negative commentary on enterprise tech spending from networking juggernaut Cisco (Nasdaq: CSCO  ) last month. But investors received a boost today in response to its fiscal third-quarter earnings report yesterday afternoon. In a sign that expectations may have reached bearish extremes, shares rallied despite results that were largely in line with consensus estimates. Even more confusing, the company's outlook for the following quarter was below current analyst expectations. But it appears that better days could be ahead, as the company's exposure to ailing Research In Motion (Nasdaq: RIMM  ) falls below 10% of total revenues going forward, and pent-up demand for other customer products drives future growth.

Shares of mobile-advertising provider Millennial Media also got a big boost today in what appears to be nothing more than a relief rally for a stock that has been under considerable pressure since its IPO earlier this year. As the largest agnostic mobile platform in the mobile arena, the company is highly leveraged to mobile ad spending, an area that Facebook (Nasdaq: FB  ) notably highlighted as a potential headwind for revenue growth in the near term. There's also evidence that mobile advertising isn't driving effective advertiser return on investment, a trend that needs to reverse for adoption to improve, and for Millennial to prosper longer-term.

Mobile-advertising headwinds are one of the biggest obstacles ahead for Facebook, which relies on advertising for the bulk of its revenue. It's one of the key arguments behind our new special report: Forget Facebook -- Here's the Tech IPO You Should Be Buying. In it, we outline a company similar to Facebook, but boasting a much more diverse business model that has led to returns of more than 50% for shareholders this year. Find out what company this is -- free of charge!

Brenton Flynn owns no shares in the companies mentioned. The Motley Fool owns shares of Facebook and Cisco Systems and has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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