Morgan Stanley technology guru Mary Meeker was among the notable speakers at the Web 2.0 Summit.
Meeker noted that, after underperforming the S&P 500 in six of the previous seven years, tech stocks have outperformed the S&P by 918 basis points, year-to-date. While much talk has been made of the reemergence of the tech bubble, Meeker pointed out that recent tech stock performance has been supported by positive earnings revisions. At the same time, she noted that the high valuations given private companies in recent transactions would require superior execution to justify the multiples.
Among key trends Meeker indicated were driving the technology market:
* Growth in consumer Internet-enabled services is driving the demand for technology infrastructure by companies like Yahoo!, eBay, Amazon, Google and others.
* Wireless innovation is accelerating with data traffic growing rapidly
* Storage needs are growing quickly; more than 50 million iPods of 4 GB or larger have been sold along with 7 million phones with at least 1 GB of storage
* Strong data center growth to support today’s technology products
* Enterprises are starting to emerge from their purchasing funk
Going forward, Meeker expects emerging markets to pace the next wave of technology adoption, led by China, India, Brazil and Russia. She also anticipates Web 2.0 technologies driving enterprise growth, long rumored but yet to happen.
The technology outlook was not all sunny, though. Meeker suggested that the risk of recession remained a potential challenge and that the risk of subprime woes spreading should not be underestimated.
Her full presentation is available from the Morgan Stanley Global Technology site.