Are Tech Service Companies Leaving Hardware Makers in the Dust?

By Chris Hill – Dec 30, 2013 at 4:45PM

NASDAQ: AAPL

Apple

Market Cap

$2,579B

Today's Change

(-0.57%) -$0.96

Current Price

$167.04

Price as of April 18, 2024, 4:00 p.m. ET

Investors are betting more heavily on tech service companies such as Facebook, Yelp, and Pandora than they are on hardware companies like Apple and Samsung. Is this the way of the future for the tech sector?

In this video from Monday's Investor Beat, host Chris Hill and Motley Fool tech and telecom bureau chief Evan Niu look at the biggest trends in the tech sector as 2013 comes to a close.

While tech hardware companies such as Apple (AAPL -0.57%) and Samsung are trading at very modest price to sales multiples, P/S ratios for service companies in the tech sector such as Facebook (META 1.54%), Yelp (YELP -0.38%) or Pandora (P) are sky-high. Evan sees this as one of the many signs that both investor and consumer sentiment is undergoing a major shift. Evan delves into what could be causing this shift, highlighting the most popular hardware devices of the day, and why investor excitement in these devices could be waning.

Chris Hill has no position in any stocks mentioned. Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple, Facebook, Pandora Media, Twitter, and Yelp. The Motley Fool owns shares of Apple and Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.