A weird moment for tech

Are things so bad in the sector that we have to buy it?

By Jim Cramer Aug 9, 2012 10:03AM

Things are so bad in tech land that we have to buy? Look, how else can you figure the big push for Cisco (CSCO) on Thursday by both Goldman Sachs and Piper Jaffray? Each is proclaiming proprietary knowledge that this time is different and that business is actually coming on strong. How else can you rationalize that twin Cisco call? This came even as Rick Hamada, the terrific chief executive officer of Avnet (AVT), said business fell off a cliff for the big-tech supermarket in June and July.


We are at a very weird moment in tech. Avnet, with its hundreds of thousands of customers, big and small, has a fabulous handle on tech demand and the company. Demand had been cruising in April and May and the first part of June -- and then got crushed in the last two weeks of June. July was no worse but not better either. That caused Avnet to miss the quarter and tell a very downbeat near-term story.


Cisco is in a different part of the tech food chain than the part Avnet called out, as it deals in mostly servers and microprocessors. However, here is enough overlap to call into question any Cisco upgrade. But two upgrades? You have to believe they've got something.


So what are the possibilities of a legitimate turn? Let's tick them down.


First, we know telecoms around the world have cut back and refrained from spending tto the point at which we started to think maybe they'd never come back. But that can last for only so long. Maybe we are at the inflection point.


Second, now that Europe is stabilizing, perhaps the same orders that were pushed back so severely in the last two weeks of June are now coming back in the first two weeks of August. Is that possible?


Third, has Cisco annihilated what is left of the competition -- Juniper (JNPR) and Hewlett-Packard (HPQ) and low-end Chinese companies -- and is flexing its muscles?


We know Cisco has made severe cuts. We know it is beginning to execute well. It is entirely possible that the world's economies are bottoming.


So I can see why this call will work.


But I also know that this whole change-on-a-dime thing is bothersome to me, and that's how I would regard a good quarter from Cisco. It's disappointed so many times.


I guess, in the end, I can't reconcile Avnet and Cisco. In fact, I can't reconcile Avnet and the tech move we are seeing. It's possible that you can say, as Hamada did, that he expects normal seasonal strength to kick in for tech. That would tell you to buy tech now, regardless of the near-term fundamentals.


That thought, above all others, seems to be what's currently driving stocks, including Cisco.



Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust has no positions in stocks mentioned.




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11Comments
Aug 9, 2012 12:35PM
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These posts in here should not be for dating services,I am sure others would agree!
Aug 9, 2012 1:28PM
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SELL-SELL-SELL

If this guy is telling you it is time to buy-You know it is time to sell.

He probably bought in at the top and is hurting so bad now he needs to get some kind of rally going just to asve his A** by screwing the suckers.

I wonder how his FB stock is doing!

 

Aug 9, 2012 1:32PM
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In short, he owns a TON of Techs, and he's looking to recoup some of his losses by getting you to buy....
Aug 9, 2012 1:07PM
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With the money he makes from his sideshow he laughs all the way to the bank, pretty sure he could care less what drivel we write...including mine...all I know is there is no such thing as an expert when it comes to the market...with that in mind I just sit and wait...if I die before the good times come around again, (and nobody knows when that will happen either!) then maybe my kids will cash in a few decades down the road. Life is good, house is paid, glad I socked away 100 US Savings Bonds back in the 80's when everyone said they were losers (6% for 30 years compounded tax free sounds pretty good now, eh?) now all coming due...like money from heaven.
Aug 9, 2012 2:42PM
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explain to me how anyone can watch or listen to this hack

Aug 9, 2012 2:55PM
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" Second, now that Europe is stabilizing " .? That is not what I hear in the news . That would be informative to know the rationale for that comment .
Aug 9, 2012 1:51PM
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A lot of the posts indicate Cramer is telling us to buy tech.  It seems he is questioning the validity of other's calls (GS & PJ) to buy Cisco.  Not sure I agree that this is a pump & dumjp.
Aug 9, 2012 4:23PM
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>>>Second, now that Europe is stabilizing<<<

 

now THERE's a funny line! 

Aug 9, 2012 11:03AM
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JIMMY BOY SAYS TIME TO BUY TECHS, NEED I SAY MORE, OH YEA, SELL SELL SELL
Aug 9, 2012 2:19PM
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Cisco?  Are you kidding me?  I guarantee the people at Goldman Sachs and Piper have never done business with Cisco.  Cisco is so difficult to deal with that everyone; customers, resellers, suppliers, and government, look elsewhere for technology. 
Aug 9, 2012 11:31AM
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look at his mannerisms as he mucks up the morning show.............this inane carney barker likes tech

so you better unload..............if you follow this hack you deserve your losses

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