Encouraging info for AMD investorsExamining the different scenarios behind those milestones, however, should offer hope to anyone whose fortunes are connected to the technology sector.
The Nasdaq high point came at the end of a boom cycle in the tech market, marked by the release of SAP's R3 ERP (enterprise resource planning) suite in 2002. The next eight years saw massive corporate take-up of technology including ERP systems, servers, and networking equipment like routers, notes Forrester analyst Andrew Bartels.
"Our analysis has shown that the tech market goes through eight-year cycles; eight years of boom followed by eight years of, not bust, but slower growth," Bartels said.
Amplifying the normal eight-year boom cycle at the end of the '90s was the massive outlay of capital on Y2K bug fixes in big corporations.
What then followed was a period of "digestion" during 2000 to 2008, according to Bartels, when businesses figured out how to leverage the technology implemented during the boom.
The Wall Street crash in 2008 and the recession interrupted what would have normally been the beginning of the next eight-year boom cycle, Bartels said.
During the new cycle, now that servers and routers are commodity items and databases and ERP systems are part of companies' core IT infrastructure, companies are looking to invest in technology such as unified communications, business intelligence, analytics, service-oriented platforms and small mobile devices, Bartels noted.
"But the financial crisis had a big impact on capital spending," Bartels said. More than the general economic recession, the collapse of credit markets forced buyers to hold off spending plans out of fear that, if they ended up needing capital, they would not be able to borrow.
Now that financial markets are stabilizing, companies will most likely feel confident enough to get back to spending on tech. This week, major financial institutions like AIG, Citigroup, Wells Fargo, Bank of America and JPMorgan Chase enjoyed upticks in shares as investors gain confidence that the worst of the recession is behind them, and those banks that got bailout money start to pay it back.
For tech, the good news is that every week brings at least one or two rosy market forecasts.
Gartner Research said that it forecast global semiconductor capital equipment to surpass US$29.4 billion in 2010, a 76.1 per cent increase from 2009 and a sign of expected demand. "The dramatic semiconductor industry recovery rate over the last three quarters has necessitated a renewed growth for equipment spending," said Jim Walker, research vice president at Gartner, in the report.
IDC said declines in the average selling price for PCs will level off, as stronger market demand from both the commercial and consumer markets translates into shipment growth this year.
The IT job market also offered good news this week. IT employment grew by 14,000 jobs in February, following a 12,000-job gain in January, according to the TechServe Alliance, which analyzes U.S. Labor Department data.
In Canada, StatsCan released positive jobnumbers. Employment rose by 21,000 in February, with large gains in full-time work partly offset by losses in part time. The unemployment rate edged down 0.1 percentage points to 8.2 per cent in February.
IT vendors and telecom companies have already started climbing out of the hole they were in a year ago.