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9 Tech Stocks That Can Sizzle in a Sluggish Economy
Customer loyalty, big growth and cost savings make tech stocks like Altera, Salesforce and Apple attractive to both businesses and consumers.

computer chipThe struggling U.S. economy has been a boost for many technology stocks. Corporations continue to try cutting costs and boost productivity through high-tech means. Also, consumers and businesses have a baseline demand for technology and communication products no matter what happens in the broader economy.

After all, can you imagine doing anything without email, cell phones or the Internet?

These nine companies continue to post stellar earnings growth throughout hard times, and will be well-positioned to benefit from a substantive recovery. Each blue-chip tech stock here is defined by customer loyalty and their essential role in cost savings:

Altera (NASDAQ:ALTR) circuits are used in anything from communications network gear to consumer electronics to industrial equipment. This company has higher gross margins than competitors like Xilinx (NASDAQ:XLNX) (71.2% versus 65.1%) and higher operating margins (45.5% versus 32.9%), so it is better positioned for market fluctuations. This is a clear winner in a growing industry.

Apple (NASDAQ:AAPL) is the poster child for customer loyalty. No matter what happens with the economy, each upgrade to the iPad, iPhone, iPod or any other Apple product sends millions into stores. Even with the passing of Steve Jobs, I don’t see this trend ending anytime in the near future. The iPhone 4S has been a huge hit with customers, and the company surely has a 4G phone in the works that will create the next wave of sales.

ARM Holdings PLC (NASDAQ:ARMH) is the chip company that’s behind just about every smartphone and tablet on the market. With soaring demand for these products — consumer and embedded digital device shipments spiked 50% year-over-year to 900 million — it’s a no-brainer why you should want to own this company.

Baidu (NASDAQ:BIDU) has kept its market domination in China despite regulatory issues and fierce competition. BIDU boasts nearly 78% market share in this very profitable and fast-growing Internet market. Also, the company is translating market share into hefty profits. In just the third quarter, profits rose 80% to $296 million dollars. That figure is expected to surge 46% per year for the next five years!

Checkpoint Software Technology (NASDAQ:CHKP) provides essential products for our online world. Checkpoint is the worldwide leader in securing the Internet, with 100% of Fortune 100 companies and 98% of Fortune 500 companies using its technology. The company currently has six patents (with an additional 25 pending in the cyber security sector) and is emerging as the go-to company for businesses and consumers around the world.

DIRECTV Holdings (NASDAQ:DTV) is the biggest satellite-TV provider in the U.S., but the real growth is coming from Latin America. In the third quarter, DTV added 574,000 new subscribers in that region. In addition, the company enjoyed 11% higher average revenue per subscriber. This is exactly where DirecTV is looking to grow in the year ahead. Subscribers across the world will also benefit from DirecTV’s plans to launch applications that allow consumers to stream live TV programming and on-demand movies to their mobile devices. (NYSE:CRM) is at the heart of the next great technology breakthrough — the cloud. Cloud computing allows businesses to use applications without actually installing them, which helps companies reduce operating costs, especially those related to computing resources. If you’ve used Yahoo email, you have used cloud computing technology. The company has been aggressively expanding through acquiring startups and churning out new products, so management expects to reach a $3 billion annual revenue rate during 2013. However, these developments have hit Salesforce’s earnings in the short run: In the last quarter, earnings dipped 131% while sales climbed 46%. It is likely that today’s growing pains will reap tremendous returns in the long run.

Teradata (NYSE:TDC) is your way to play increasing demand in electronic data storage and customer analytics. And Teradata’s data management solutions are in hot demand because they are among the most cost-effective means for companies to manage the data explosion. The company has been steadily increasing earnings expectations, and I expect this will continue throughout 2012.

VMware (NYSE:VMW) is another cloud company. It has posted earnings growth and earnings surprises in each of the last four quarters, and I don’t see any major barriers to VMWare’s success in the year ahead.

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