TECH - 4 Stocks to Watch From a Prospering Technology Solutions Industry | Benzinga
Players operating within the Zacks Computer – Integrated Systems industry, including International Business Machines (NYSE: IBM), Hewlett Packard Enterprise (NYSE: HPE), Agilysys (NASDAQ: AGYS) and PAR Technology (NYSE: PAR), are reaping the benefits of several favorable industry trends like advancements in data management capabilities, a rapid shift away from traditional siloed systems toward more integrated deployment techniques and heightened demand for modern application development approaches. However, the industry is still recovering from significant headwinds stemming from persistent supply chain bottlenecks, a challenging macroeconomic climate characterized by rising inflation and higher interest rates, soaring prices for key inputs and delays in customer acceptance of new products and services. These factors have resulted in significant order backlogs across the industry, casting a shadow on its prospects.
Industry Description
The Zacks Computer - Integrated Systems industry comprises companies that deliver advanced information technology solutions spanning computer systems, software platforms, data storage infrastructure and microelectronics. These industry players are ramping up investments in data modernization and analytics, cybersecurity and threat defense, remote work enablement, process automation, contactless service delivery models, enhanced customer and employee experience offerings and supply chain modernization initiatives, which are aimed at accelerating digital transformation services for their enterprise customers. Some players provide technological solutions (products and services) to help organizations connect, interact and transact with customers. Others develop and market information recognition, data entry software, systems and technologies.
4 Computer - Integrated Systems Industry Trends in Focus
Integrated Solutions Driving Demand: The industry is experiencing a surge in demand for integrated solutions across enterprises of all scales, driven by increasing investments in cutting-edge software technologies such as the Internet of Things (IoT), big data analytics, artificial intelligence and blockchain. This demand is further fueled by the significant opportunities presented by business analytics, cloud computing, mobile technologies, security solutions and social business platforms. Additionally, industry players are anticipated to benefit from the recovering global IT spending, as predicted by Gartner, enabling them to capitalize on the rising demand for comprehensive and seamless integrated solutions that can streamline operations and enhance productivity across various sectors.
Solid Adoption of Multi-Cloud Model: The industry is witnessing the robust adoption of the multi-cloud model, as enterprises seek to achieve better scalability and optimize resource utilization. This trend is expanding the scope of industry participants, enabling them to leverage the benefits of cloud and hardware/software virtual technologies, which are anticipated to favor the industry's growth. Moreover, as growth and investment opportunities in developed countries continue to slow down, emerging economies are poised to play a crucial role in driving the industry's future. The multi-cloud model's increasing popularity, coupled with the favorable tailwinds from cloud and virtual technologies, and the potential of emerging markets, presents a strong foundation for industry participants to capitalize on new opportunities and foster sustained growth.
Supply-Chain Bottlenecks and Backlogs: Industry participants are grappling with a multitude of challenges, including supply constraints, softening demand for servers and cognitive applications, as well as delays in customer acceptance. These factors have contributed to consistent backlog levels, particularly in the Compute, High-Performance Computing & Mass Storage Class and Storage segments. Furthermore, the industry's outlook is affected by the volatility in foreign exchange rates, primarily due to the prevailing macroeconomic scenario and headwinds in emerging markets.
Semiconductor Chip Shortage Mars Prospects: The industry is grappling with the ripple effects of the ongoing semiconductor chip shortage, which has posed significant challenges for participants. The time-consuming business model transition to cloud computing has compounded these difficulties, requiring companies to ...