The Wall Street Journal reports that Hewlett Packard (NASDAQ: HPQ) will spend $12.8 billion to buy Electronic Data Systems (NYSE: EDS). While this combination would make HP the second largest, behind International Business Machines (NYSE: IBM) in computer services, this may not be a good way to spend $12.8 billion.

That's because EDS and HP would under perform in services when it comes to profitability. EDS's bigger business earned a 1% net profit margin in the first quarter. But HP's services business generated a far higher 9% estimated net margin. Unfortunately -- for reasons described below -- the combined company will probably have lower margins.

Meanwhile, IBM's profit lagged HP's slightly -- it made an estimated 7% net margin in the first quarter in its services business. But IBM is and will remain a much bigger player. Combined, EDS and HP's services business will control 5.3% -- lagging IBM. That's because IBM controlled 7.2% of the tech-services market in 2007 while EDS was a distant second at 3% and HP was fifth, with a 2.3% share.

"Now 157 years old, Corning (NYSE: GLW) has come from window making to sit at the forefront of two of the fastest-growing segments of the technology space: flat panel TVs and fiber-optic," says tech expert Mark Mowrey.

In The Prudent Speculator TechValue Report, the advisor explains his bullishness on Corning, which has shown a "long-time commitment to future-focused research and development."

"For both its TV and fiber optics markets, the company supplies glass. We're not talking dinnerware, though. Rather, the company is the leader in selling flat panel display glass and fiber-optic cabling. is testament to

"In addition Corning maintains an Environmental Technologies business, which develops emissions and pollution control products, and a Life Sciences business, where the company makes lab glass and drug testing products.

"For the past three quarters, revenue has been growing at a double-digit pace overall, hitting $1.58 billion in the final quarter of last year, as both the Display Technologies and Telecommunications businesses made up for relative weakness in Environmental Technologies.

"Yet, the stock's forward earnings multiple has trended steadily downward, we suppose, as fears increase that both those markets eventually will prove less profitable as competition increases. On the contrary, we think end-market growth will hasten, while Corning's technological lead expands.

"The more I look at Apple (NASDAQ: AAPL) and its new iPhone, the more I consider it to be, perhaps, the most innovative and transformative company in mobile computing today," notes wireless sector expert Nikhil Hutheesing.

The editor of The Forbes Wireless Stock Watch explains, "Put simply, iPhone is a game-changing product, and we are now making the case for investors to buy the stock."

"When Apple first announced its move into the wireless PDA business - in January 2007 when it introduced its iPhone - there was skepticism over whether it would be able to grab market share from incumbents like Research In Motion, which makes the BlackBerry smartphone and Palm which makes Treo handhelds.

"Nobody is doubting Apple today. Steve Jobs' iPhone is in the hands of over four million people and it is now the number two smartphone in the business with a 28% market share. It has surpassed Palm and is nipping at the heels of RIMM's BlackBerry.

"Until recently, iPhone, like Apple's Mac has been a fairly 'closed' universe. It was a great consumer device but it had little presence among large corporate users, the so-called enterprise market. That all changed in March.

As investors debate over the iPhone from Apple (NASDAQ: AAPL) vs. the BlackBerry from Research in Motion (NASDAQ: RIMM), growth stock guru Toby Smith sees room for both in his ChangeWave Investing portfolio. Here's his latest.

"Apple recently took a big step out of its consumer-oriented world and into the corporate realm, one dominated by Research In Motion.

"Apple is teaming up with Microsoft to make the iPhone more 'businessy' for corporate users. Obviously, when the iPhone was launched, it was a huge success with consumers. Now, Apple is opening up the platform and making it more appealing to businesses.

"With its much-awaited iPhone software developers kit, Apple is banking on third-party software to differentiate the iPhone from the BlackBerry. The biggest challenge for Apple will be overcoming concerns about security, e-mail synching and the iPhone's high price.

"Undoubtedly, this shift into the corporate realm will take time, and it will likely be the small- and medium-sized companies that are the first to adopt the iPhone for business.

"Rivals may be creating a buzz in the market for navigational technologies, but Garmin Ltd. (Nasdaq: GRMN) will fight off its rivals as it always has, with product breadth and innovation," says Ian Wyatt in Top Stock Insights.

"Garmin, which first started selling products in 1991, has been on a run. Since 2001, the company has compound annual revenue growth of 30%; net income has grown 29% compounded annually.

"Through sound financial execution, Garmin has become a worldwide leader in providing navigation, communication and information devices, many of which carry global positioning system (GPS) technology.

"The automotive and mobile division, which represents the company's portable navigation devices (PNDs), dominates the company's business. PNDs are the fastest growing, most competitive and most consequential market for Garmin and accounted for 71.2% of revenue in third quarter of fiscal 2007.

"In the North American PND market Garmin's share is more than 50%, and its PND share in Europe is 20%. Itss market share is greater than 60% in aviation and higher than 30% in marine electronics. The company's main geographic market is North America, followed by Europe, and then - to a much smaller extent - Asia.

"This is still a psychologically damaged market; take for example, what happened with VMware (NYSE: VMW) after its latest earnings announcement," notes Toby Smith in ChangeWave Investing.

"VMware recently reported that its fourth-quarter net income more than doubled on an 80% increase in revenue. Despite these excellent results, after-hours selling has plunged the shares lower by 25% to around $61.

"The culprit appears to be analysts' forecasts for an 82% increase in revenues. The buzz on the Street is that this miss signals stiffer competition in the virtualization space from Microsoft (NASDAQ: MSFT) and Oracle (NASDAQ: ORCL).

"However, during the conference call VMW management said customers have tried some competitors' products and told them that they see no reason to switch.

"This sell-off is similar to what recently happened to Apple (NASDAQ: AAPL) -- blowout performance followed by a hatchet job on the shares. As with Apple, we see this price drop in VMW as a great opportunity to establish a low cost-basis in the stock.

With the Booyah man himself all but throwing in the towel on technology stocks, his frustration is understandable but his conclusion is off. As I have posted, I actually think that tech will lead the broader market higher.

As Cramer admits, earnings have been strong for much of the sector. Companies like IBM (NYSE: IBM) and Microsoft (NASDAQ: MSFT) had great reports. So what if the stocks haven't spiked? The whole market has been a disaster. There are tons of stocks that have put up nice earnings and yet barely moved. All the more reason to buy into these tech names. Once we get a sustainable rally -- and we will get one eventually, I promise -- these stocks will soar, as investors will want to get into the strong growth names.

It may well be that the big tech names that had huge moves last year, like Google (NASDAQ: GOOG), will be soft but investors should keep their eyes on smaller tech companies, as those are really poised to make a run. Why? The first reason is because of strong earnings. The second reason is because of potential M&A. With many of these smaller companies seeing their values halved during the recent market rout, larger companies are going to move in and try and buy these companies on the cheap.

Jim, a little patience my friend, a little patience.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has no positions in any stock mentioned as of 1/29/08

In recent weeks, the Nasdaq-100 Index (NDX) has lost considerable ground on an absolute basis and relative to the S&P 500 index.

Interestingly, if you graph the relationship between the large cap, technology-heavy bellwether and the broad market index going back to 2002, the pattern of recent months looks vaguely familiar.

In fact, it seems to be a mirror image of the false breakdown that occurred in the summer of 2006. After that particular "head fake," the ratio staged a major upside reversal, and technology shares outpaced the S&P 500 index by a wide margin over the course of the following 12 months.

Executives at big tech companies say that they see no recession, at least in their businesses. They seem to have at least some support for their thinking. According to the FT, "Tech executives also point to their broader diversification. While emerging markets represent 10-15 percent of the revenues of most big tech companies, they have come to account for a far larger part of their growth."

IBM (NYSE: IBM) turned in strong results. So did enterprise software company SAP (NYSE: SAP). But a quarter does not a trend make, even if forecasts for next year are good. A forecast is only as good as the next quarter.

Business in Asia is not immune from a slowdown. It may not be evident today, but there are already some signs. After tremendous increases last year, stock markets in China are not rising much now. Investors in that market are sending signals that their outlook may not be rosy.

A sharp slowdown in the US and Europe is bound to hit Asia because exports from those countries into the developed world will drop. China's economy is built to "hyper-growth" so a step down in expansion could bring financial, real estate, and economic markets there down with a crash.

Asia will grow until its doesn't. That may come sooner that many tech executives believe and would leave their growth plans in the mud.

Douglas A. McIntyre is an editor at 247wallst.com.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"We have chosen Cisco Systems (NASDAQ: CSCO) as our favorite for 2008," says Jim Farrish, editor of Sector Exchange.

"Looking into 2008, one area we like is technology, and one of the stronger sub sectors has been the internet. It is important to note the build-out of the internet is not done. Content is still being created at a rate no one can fathom and technological advances continue to explode.

"This brave new world comes with the ability to provide internet video downloading at a rate that will excite and attract users like never before. Why? First, the ability to increasingly compress data and more effectively use bandwidth and second, the expanding infrastructure of the internet.

"While the sector has struggled since the negative Cisco earnings announcement in November, we see opportunity in this downward move. If we consider the reason for the decline, we find it wasn't fundamental; it was judgmental.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"Although the nanotech sector in general is more speculative, a relatively more conservative pick within this space is PowerShares Lux Nanotech Portfolio (ASE: PXN), a favorite of mine for 2008," says nanotech and science guru Josh Wolfe, editor of the Forbes Wolfe Emerging Tech Report.

"With a significant amount of hedge fund assets in companies with market caps below $5 billion, the past quarter's liquidity crunch has hurt small-cap companies. The PowerShares Lux Nanotech Portfolio has seen significant decline with its small-cap constituents.

"But it also has large-cap multinational companies with significant overseas business. A year ago I liked it because it was a representative diversified index of companies that derived value from incorporating nanotech into their product lines.

Today, it's on sale today and if you want exposure to this long-term secular trend of advanced materials and nanotech and you're willing to be a long-term holder, I'd make it a piece of a broader portfolio. (Full disclosure: I'm a shareholder in Lux Research, which partnered with Powershares to form the index)."

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"Silicom Ltd. (NASDAQ: SILC) is my favorite speculative pick for 2008," says Benson George, in Rising Star Stocks.

"The company's focus is on high-performance Ethernet server adapters. Its products facilitate interaction between servers and enable them to communicate with each other through a number of ports. Silicom's solutions are designed to increase server availability, security and throughput for server gateways.

"The company markets its products directly to OEMs that in turn sell Silicom's products under their own private labels or integrate Silicom's products into their own products.

"The company is exclusively focused on being the leader in server adapter card technology and markets. Revenues for the first nine months of 2007 increased by 74% to a record $19.3 million compared with $11.1 million for the first nine months of 2006. Net income for the period increased by 191% to $4.5 million.

"Silicom is on track for what will be a record-breaking year; the only question is by how much? The company is on pace with double what it earned per share in all of 2006 (49 cents). If demand continues unabated, revenues should reach $26 to $27 million for all of 2007, almost 70% ahead of 2006's $16 million revenues.

"Silicom is well positioned to succeed. It offers superior products in a market experiencing superlative growth. We are initiating coverage with a 'buy' rating and price target of $22, which represents a multiple of 20 times the forward year consensus analyst estimate of $1.08 in EPS."

"My favorite speculative pick for 2008 is QuickLogic (NASDAQ: QUIK)," says Paul McWilliams, editor of Next Inning. "This is a swing for the fence with a potential upside substantially over 100%. However, coupled with this potential upside are significant risks that investors should carefully consider.

"Manufacturers of battery-powered high-end consumer devices must minimize power consumption and often require instant-on capability and desire strong copy protection -- all areas where QuickLogic excels. And, even more important for QuickLogic, these customers not only couldn't care less if a part can be reprogrammed; they don't even want to deal with programming it once.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My top conservative idea for 2008 is Cisco Systems (NASDAQ: CSCO)," says Rusty Szurek with Next Inning.

"While the phrase has definitely lost some of its cache, the simple fact remains, 'video changes everything' and for Cisco, that's doubly true. Cisco stands to benefit from the explosive growth we're seeing today in IPTV and internet video.

"The firm will not only benefit from the specialized video equipment it obtained in its acquisition of Scientific Atlanta, but also by the higher traffic demands video places on both the internet as a whole and on business and home networks -- all markets where Cisco is far and away the world market share leader.

"Some might say that Cisco's push into dedicated video products, which range from service provider equipment to home set-top boxes to its TelePresence initiative that is visible in virtually every major corporation in the world today, is like the salty pretzels served free at your local bar.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My more speculative favorite for 2008 is Market Vectors Nuclear Energy (ASE: NLR)," says scientist and technology stock expert Josh Wolfe, editor of the Forbes Wolfe Emerging Tech Report.

"The Market Vectors Nuclear Energy exchange traded fund is one of the first dedicated nuclear energy ETFs, with exposure to both domestic and international companies. It began trading in August 2007.

"I'm a nuclear bull for a few reasons. As fears of global warming rise, fears of nuclear recede -- even environmentalists are getting on board. A month ago for the first time in US history, a coal plant was denied in Kansas on environmental grounds.

"I've called this the 'Kansas Syndrome' -- like the 'China Syndrome' that crippled growth of nuclear power for three decades -- coal's future may soon be in doubt.