A Non-Techie's Guide to the Tech Sectorhttp://www.fool.com/investing/general/2012/09/16/a-non-techies-guide-to-the-tech-sector.aspx Nicole Seghetti
September 16, 2012
This month at The Motley Fool, we're taking an all-hands-on-deck approach to getting back to basics, culminating on Sept. 25 with Worldwide Invest Better Day. With this in mind, my Foolish colleagues and I are opening the floodgates with vital information to help you invest better. In a previous article, we reviewed stock diversification, a key fundamental of investing. We're taking a look at stock sectors one by one, and we're focusing today on tech stocks.
The ins and outs of the sector
Tech stocks carry a higher risk profile relative to other sectors driven by continuous innovation. Rapid obsolescence is a consequence. Today's hot tech stock may be a dinosaur tomorrow. As a result, successful tech companies constantly innovate.
How the sector performs
Major players, big trends
In the industry's shift from servers to service, cloud computing has emerged. Cloud computing allows us to access resources through networks instead of running slow software or storing bulky data on our computers. Both Rackspace Hosting (NYSE: RAX ) and Amazon.com (Nasdaq: AMZN ) are venturing into this pay-for-what-you-use model but are approaching it in two different ways. Instead, Apple (Nasdaq: AAPL ) , trading at an all-time high, makes its money on the hardware and software. Apple's record sales of its prolific iDevices are driving mobile data traffic to new highs. Global mobile data traffic more than doubled last year and is expected to double again in 2012. One similarity between these three companies? Their stock-price performance. All boast 52-week highs, and Rackspace, Amazon, and Apple have enjoyed year-to-date returns of 52%, 46%, and 68%, respectively.