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Tickers in this Article: AAPL, RIMM, GOOG, AMZN, IBM, HPQ, ORCL, MSFT, EBAY
Back in June 2007, well-known market pundit Jim Cramer loudly declared on his "Mad Money" show that a new group of technology stocks, which he dubbed the "Four Horsemen", had "taken over" and would be the ones worth owning. These "horsemen" consisted of the shares of four technology giants: Apple (Nasdaq: AAPL), Research in Motion (Nasdaq:RIMM), Google (Nasdaq:GOOG) and Amazon (Nasdaq:AMZN).

Now that more than a year and some serious market turbulence have passed, how have these stocks managed to weather the storm?

Not Bad, Actually

If you had bought a board lot (100 shares) of each of these Four Horsemen back on June 6, 2007, excluding commissions it would have cost you $64,085. As of the market close on September 30, that portfolio would be worth $65,524, producing capital gain of 2.2 percent. Not an overly big number in itself, but when compared to the almost 22 percent loss suffered by the Nasdaq index over the same period, it's safe to say that these horsemen made it into the winner's circle.

Now that they're well off their highs from earlier this year, what are the odds that these stocks will continue to outperform? The best way to answer that question is to try and get a handle on each company's fundamental prospects at this juncture. Let's start with Apple.

iPhone Key To Apple's Premium Valuation

With its ability to produce quality, stylish products crammed with leading-edge innovation that have quickly become consumer must-haves, Apple is still every inch the "aspirational brand" company that prompted Cramer's nod last year. Having sold more than 100 million iPods, the company basically owns the portable music space, and with the launch of the innovative iPhone, it's aiming to do the same in the mobile-phone handheld market.

With iPod sales growth leveling off into the single digits, Apple's ability to maintain its premium valuation (price/earnings ratio of 20 based on fiscal 2009 expected earnings) hinges on consumers' continued willingness to fork over $400 to $600 for a bit of techno-cachet. Apple is hoping to sell more than 10 million units of the more pricey 3G version of the iPhone in 2009. As economic times get more challenging for consumers, that might prove to be a tough sell. (What people buy and where they shop can provide valuable information about the economy. Read Using Consumer Spending As A Market Indicator to learn more.)

RIMM Now Playing Increasingly Costly Game Of Catch-Up

Research in Motion, which won over millions of users by providing mobile e-mail with its signature BlackBerry, is poised to launch a touchscreen version of this product. However, getting to that techno-sweet spot that dazzles potential buyers isn't coming cheap. Recently, RIMM shares plummeted when the company announced that higher development costs for these new products would lower earnings and margins in the coming quarter. The company announced that expected earnings per share for Q3 ending December 1 would now be in the range of 89-97 cents compared to analysts' average expectations of 98 cents. (For more on analyst expectations, read Analyst Forecasts Spell Disaster For Some Stocks.)

Google Enters The Smartphone Fray

The undisputed king of internet search has jumped into the smartphone market. Last week, Google premiered the G1 Android, offering touchscreen technology and mobile internet similar to the iPhone but at a significantly lower price ($179 with a two-year contract with T-Mobile). Some analysts predict that Android could achieve 2 million to 3 million unit sales globally. It's an interesting but somewhat risky diversification move for Google. The company's shares recently dipped below the psychologically important $400 level amid fears that search-engine advertising, which constitutes 99 percent of the company's revenues, could be hit by the economic slowdown and the financial crisis.

Amazon Enters Corporate Computing Market

In another example of a move into a new and unexpected area, online retailing giant Amazon has been busy trying to establish a foothold in the so-called business of "cloud computing". The idea is to leverage the company's internal IT competencies by selling corporate customers services like custom programming and data storage. This puts Amazon into direct competition with the likes of IBM (NYSE:IBM), Hewlett Packard (NYSE:HPQ), Oracle (Nasdaq:ORCL) and Microsoft (Nasdaq:MSFT) at a time when its core retail business is facing increased competition from online auctioneer eBay (Nasdaq:EBAY), which recently overhauled its fee structure to encourage more users to offer fixed-price items on its website.

The Final Word

The common thread through these companies is that they've all taken somewhat risky steps entering into new and highly competitive markets, presumably as a direct response to the increasing competitive challenges now facing their core businesses. This has materially raised the level of business risk they now face on the cusp of an economic downturn. That wasn't the case back in June 2007, when Cramer made his timely call. If things don't work out for these Four Horsemen, the thunder of hooves that you wind up hearing just might be the sound of investors' footsteps as they head for the exits.

(Read more about Cramer and his recommedations in our related article, Mad Money ... Mad Market?)

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