Tech Distributors Left in the Dust

S&P's Cathers says margin pressures and a lackluster PC upgrade cycle may leave many distributors without enough growth to spark shares

Lately, there has been a clear divide in the performance of technology distributor stocks. Distributors of the nuts and bolts used to make electronic gadgets like cell phones—namely, Arrow Electronics (ARW) and Avnet (AVT)—have surged 25% and 43%, respectively, this year (through Feb. 26) thanks to strong demand for storage and other components. Meanwhile, the shares of distributors of finished goods like PCs, servers, and printers—such as Ingram Micro (IM) and CDW (CDWC)—have been left in the dust.

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