This quarterly global snapshot of activity in the technology sector highlights trends, business challenges and opportunities. In this edition we review the third calendar quarter of 2014.
Financial results in the third quarter were varied across the technology sector. Internet and software companies have generally outperformed communications, hardware and semiconductor companies, but this quarter, several major players did not meet market expectations. The reasons varied – ranging from stepped up investment to declining user base growth rates. For hardware and communications companies, turbulence and transformation continues with several large players announcing plans for divestitures and spinoffs. With uncertainty comes market volatility and this was borne out as the VIX reached 17 in late July, pulled back to about 12 in mid-August and then rose again to almost 17 at the end of September. Since that time it spiked at 26 October 15th and today stands at roughly 20.
While volatility has been on the rise, the outlook remains positive with the PMI (Purchasing Managers Index) posting another gain at 57.6, slightly below the high of 61 posted in the first quarter of 2011 and the third quarter in a row it has moved higher. US markets have also remained strong with the Dow Jones Industrial Average breaking the 17,000 level in July. Against this backdrop, third-quarter technology IPOs set a new record at US$24.8 billion in proceeds, increasing 105% from the prior quarter as a result of Alibaba, the largest IPO on record.1
Detailed financial information can be accessed by clicking on the "explore tool" on the home page at www.pwc.com/techscorecard.