3 Tech Stocks to Buy in 2009

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Which tech stocks should you buy for 2009? Buy the ones that are creating movements, million-dollar megatrends. Trends like cloud computing.

Your portfolio in the clouds
At its simplest, cloud computing is computing via the Web rather than your local machine. The software, the processing power, it's all handled in a data center off the coast of Madagascar. Never mind the guy with the white cat and evil laugh. He's been there for years. Calls himself "Master of the Internets."

No word yet on whether anyone will file suit for trademark infringement. I doubt it, though. Fables are tough to beat in court. Just ask anyone who's watched the original Miracle on 34th Street.

So let's stick with reality. Here, the central truth of cloud computing is there are millions of servers delivering content to Web-connected users daily. Some of that data even originates in Madagascar.

More of it, though, originates here, at data centers operated by some of the biggest tech firms. Increasingly, they're storing, filtering, and delivering corporate data, enhancing or even replacing buy-and-install software from Oracle (Nasdaq: ORCL  ) , SAP (NYSE: SAP  ) , and Microsoft (Nasdaq: MSFT  ) .

Roughly 13% of 2008 software sales were to cloud providers, the Associated Press reports. Meanwhile, analyst Frank Gens of IDC Research estimates that cloud services spending will rise 27% a year within major IT segments over the next four years.

How to compute in the cloud
I know what you're thinking. No one's really using cloud computing, right? Sure you are. Do you bank online? That's a crude form of cloud computing, especially if you use the Web to track transactions a la our free personal finance service.

And what of the iTunes App Store? YouTube? These are services you're exposed to via the cloud. Clicking in your browser activates them, but the magic happens elsewhere. If Santa's gift to Apple is any indicator, a lot of you love the games you're finding via the cloud.

Millions also like Twitter, a Web-based micro-blogging service that's supported by an entire ecosystem of software that brings the cloud to your desktop. TweetDeck, built on top of Adobe's (Nasdaq: ADBE  ) AIR platform, is a good example.

The convenience and low cost of cloud services makes them attractive to both consumers and IT managers now, in a time of recession. That's at least partly why writer Darryl Taft of trade magazine eWEEK has said that 2009 "is shaping up to be a big year for the cloud."

Let these cloud giants rain cash on you
If he's right, and I think he is, then which cloud computing stocks should you, the Foolish investor, buy? I have three ideas.

Let's start with (Nasdaq: AMZN  ) , my choice for the best stock of 2009. Microsoft's Ray Ozzie says the firm is the current king of cloud computing. And it may continue that way for a while. James Hamilton, widely considered one of the architects of the data center strategy that birthed Windows Azure, has left to join ... Amazon's Web Services team.

Google's (Nasdaq: GOOG  ) Apps suite won't soon replace Office, but it is winning converts, including drugmaker Genentech. What's easy to overlook is how Google is creating an entire ecosystem to support (i.e., the Chrome browser, Mashup Editor) and host (i.e., App Engine) software in the cloud. If anyone other than Microsoft is on course to create an operating system for the Web, it's the Big G.

Finally, the evangelist: (NYSE: CRM  ) . CEO Marc Benioff has been declaring the end of software for years. Now, he's got proof. Third-quarter revenue rose 43%. Profits were up 55%. IT shops are adopting in greater numbers. Developers, meanwhile, have created 80,000 new services for the cloud using the company's platform that, as of earlier this month, was linked with Google's App Engine.

But those are my three ideas. What about yours? Would you buy any of these stocks? Would you short any of them? Insert your comments below, and be sure to tune in tomorrow for a look at three tech stocks you'll want to sell in 2009.

Apple and Amazon are Stock Advisor selections. Microsoft is an Inside Value pick. Google is a Rule Breakers recommendation. Try any of these Foolish services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers is a member of the Rule Breakers team and had stock and options positions in Apple and Google and a stock position in Oracle at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.

Read/Post Comments (5) | Recommend This Article (23)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 30, 2008, at 7:40 PM, MountainDewd wrote:

    But is it better to invest in the software side of cloud computing, or to invest on the hardware supporting it?

  • Report this Comment On December 30, 2008, at 10:58 PM, CashonDelivery wrote:

    There is no spoon

  • Report this Comment On December 31, 2008, at 1:23 AM, trekkq wrote:

    I would definitely left out SAP and Salesforce from the choice.

    SAP is already a slow walking dinosour, and Salesforce, well, I am not sure what they would offer to stand out in the future market. Even Larry Ellison don't want this company.

  • Report this Comment On January 04, 2009, at 10:17 AM, JFShaker wrote:

    AMZN will win big over time and so will RAX (rackspace).

  • Report this Comment On January 29, 2009, at 7:34 AM, skepfool wrote:

    Why do I see less and less value in any of these stories and reccomendations on Fool ? Every pick is down for last years except a couple. I think anyone can do this ust by choosing 24 stocks a year and dont see any value here at all.

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