No Slowdown in IT Spending

May 13, 2008

Our special focus this week is on Internet Services. We spoke to analyst Moshe Katri of Cowen and Company, who covers the IT services area of this space, Mr Katri had some interesting points about IT spending during the turbulent time in the economy:

At present, there is no massive slowdown in IT spending.
The pattern of IT spending, whether or not it does slowdown in the future, will be significantly different than the slowdown that occurred in 2001-2003.
The reason for this is that IT spending growth has been very disciplined of late: about 2% or 3%. Compare this with the 15% to 20%, and you can see why, if there is a slowdown, it will significantly less dramatic.
The only place that have seen dramatic slowdowns so far as place connected with the financial institutions that are facing the fallout of the subprime issue.
Despite this, Mr. Katri points to several companies that are well positioned in this area: Infosys Technologies (INFY), Cognizant Technology Solutions (CTSH), as well as Accenture (ACN), and the service arm of IBM (IBM).

For the full interview with Mr. Katri, including a complete outlook for what’s to come in rest of 2008, and more stock picks, click here.

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