As Tech Stocks Rally, Company Orders Boom

Editor's note: As part of our partnership with Nightly Business Report, TheStreet's Jill Malandrino will appear on NBR Monday (check local listings) to look at Apple and the latest market trends.

NEW YORK (TheStreet) -- Top executives at technology companies such as Texas Instruments , Seagate and F5 Networks say there's robust spending among customers, which bodes well for the stock market rally of 2012.

After an uncertain 2011, the tech sector has enjoyed a strong start to 2012, boosted by improved enterprise spending and growth in emerging markets. Set against this backdrop, the Nasdaq has climbed more than 14% this year.

Texas Instruments set the tone for tech earnings season, when the chip maker reported better-than-expected fourth quarter results in late January.

Kevin March, Texas Instruments' chief financial officer, said in an interview the company is seeing a bottom in the IT spending slowdown. "We believe that we're there," he said. "We either hit the bottom in the fourth quarter, or we're very near it and will hit it in the first quarter."

The Qualcomm rival said revenue was better than anticipated across all of its major product lines.

Pat O'Malley, the CFO of hard disk drive specialist Seagate, also noted an improved spending climate, and struck a cautiously optimistic tone for 2012 because of Europe's debt woes. Greece is essentially bankrupt and other countries have needed a lifeline from the European Central Bank.

"I would agree with Texas Instruments on the general thesis, but there's still structural issues that need to be resolved in a more seamless and transparent way in Europe," he said during an interview after the company's recent second-quarter results. "Spain and Italy have significant debt restructuring -- as long as governments solve these problems, we should have an OK year."

Seagate, which recently hit a new 52-week high, shredded Wall Street's second-quarter earnings forecast. The Fujitsu and Western Digital competitor shipped 47 million hard drives, a figure which it expects to reach 60 million during the current quarter.

Mike Smerklo, chief executive officer of technology services specialist ServiceSource , said demand is strengthening. "We feel generally pretty good about the market environment going forward," he said, after the company's fourth-quarter results last month. "We're seeing accelerated interest in what we're doing."

ServiceSource works with tech companies to boost their revenue from subscription services via cloud-based technology. The San Francisco-based firm brought in revenue of $60.3 million during the fourth quarter, an increase of 37% from a year earlier.

Smerklo, however, said that, region by region, it's difficult to identify a global spending trend, but acknowledged plenty of positive signs. "The mood, when you're speaking to the CEOs of global technology companies, is generally a bit better than it was a year ago."

John McAdam, the CEO of F5 Networks , said orders suggest robust revenue ahead.

"We put in good sequential and year-over-year growth," he said during an interview following the networking specialist's fiscal first-quarter results. "We see the pipeline as pretty strong."

F5 reaped the benefits of strong service provider spending during the quarter, despite concerns about the sector from networking giant Juniper .

Semiconductor specialist LSI also put out strong numbers during its recent fiscal fourth quarter, with CEO Abhi Talwalkar saying the company is growing faster than its rivals.

"Our guidance was very strong, ahead of all end markets," he told TheStreet. "We feel very comfortable in our ability to outpace the end markets and the majority of our peers."

Bob Hammer, the CEO of storage specialist CommVault , said his firm hasn't suffered from weaker demand.

"From a CommVault business perspective, we haven't seen any slowdown at all," he said after the company's recent record third-quarter results. "We just haven't seen it."

Not every CEO, though, is as bullish.

"I don't know that my crystal ball is good enough," said Bob Beauchamp, the CEO of BMC Software, which put out mixed fiscal fourth-quarter results last month. "There's too much uncertainty to forecast what spending is going to be in Europe."

"The core issue for us continues to be rebuilding our sales force capacity," Beauchamp added. "We're really focused on building the sales channel -- we feel that we're channel-constrained."

--Written by James Rogers in New York.

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