What is the 'Technology, Media, and Telecom (TMT) Sector'

The technology, media, and telecom (TMT) sector, sometimes also referred to as technology, media, and communications (TMC), is an industry sector used by investment bankers, investors, traders and other market participants. Because this industry segment covers a broad range, it is often useful to break down TMT into sub-sectors such as semiconductors, hardware, software, mobile, Internet, networking, etc. Because this sector contains new and high-tech firms, it experiences a large amount of mergers, acquisitions and initial public offerings (IPOs).

BREAKING DOWN 'Technology, Media, and Telecom (TMT) Sector'

The technology, media and telecom sector includes a wide range of companies, but they are interrelated in that they heavily depend on research & development (R&D), the value of patents and other intellectual property protections, and preferring rapid company growth. As a result, valuation of companies in this industry segment may tolerate relatively high price to earnings (P/E) ratios in favor of enterprise value to sales (EV/Sales). 

Within the TMT sector it is useful to subdivide it into relevant sub-sectors. Semiconductor manufacturers develop and produce integrated circuits and microchips used in all sorts of applications from personal computers and mobile devices to robotics and industrial machinery. Some representative firms are Intel, AMD, Texas Instruments and Nvidia. 

Telecom focus on communications-related businesses such as phone, TV and Internet service providers and include players such as AT&T, Verizon, and Sprint. 

Hardware includes computer makers (IBM, DELL, HPQ), but also makers of server systems, mobile device handsets, tablets and storage devices such as hard drives and memory. 

Internet companies exist online and include companies like Facebook, Groupon, LinkedIn and Zynga. 

Software companies produce computer or mobile applications for both individuals and enterprise and include Microsoft, Adobe, and SAP. 

Networking companies maintain, install, and produce components for wired and wireless computer networks including fiber optic cable, switches and routers. Some big players in the networking space include Cisco Systems, Juniper Networks, Netgear and Ciena Corporation. 

Media companies develop, produce and distribute multimedia content on TV, radio, in print and online. Television networks, cable TV providers, production studios and social media companies may all be included in this sub-sector.

Different market participants may categorize different TMT companies in different sub-sectors. Facebook may be viewed as either Internet or media, and Apple as Internet, hardware, software and media depending on who is judging the company. Other examples that cross sub-sectors are Hulu, Amazon and Netflix. Sometimes, companies in one sub-sector of TMT will merge or acquire another to consolidate, diversify and broaden product offerings. This has been seen in the examples of AOL and Time Warner, AT&T and Dish Network, and Dell and EMC.

RELATED TERMS
  1. Technology Sector

    The technology sector is a category of stocks relating to the ...
  2. Social Media

    Social media is a computer-based technology that facilitates ...
  3. Cloud Computing

    Cloud computing is a model for delivering information technology ...
  4. Sector Fund

    A sector fund is a fund that invests solely in businesses that ...
  5. Social Networking

    Social networking is the use of internet-based social media programs ...
  6. Distribution Network

    A distribution network is a company's interconnected group of ...
Related Articles
  1. Investing

    How To Pick The Best Telecom Stocks

    This ever-changing industry can leave investors scratching their heads. Find out which metrics matter.
  2. Small Business

    Social Media: High Risk, High Potential Returns

    Carefully selecting social media ETFs can provide you with the opportunity to diversify your portfolio and enjoy financial rewards due to user growth.
  3. Tech

    AT&T Eyes Argentina Amid Telecom Reform (T)

    Telecom reform is coming to Argentina and AT&T is one of the companies eyeing the market.
  4. Investing

    Top 5 Computer Stocks of 2016 (AAPL, HPQ)

    In the technology sector, there are a number of both hardware and software computer stocks for investors to consider adding to their 2016 portfolio.
  5. Trading

    The Power Of Social Media: Influencing Trading And The Markets

    Check out the growing power of social media, and how it is being used to predict and influence investment markets.
  6. Investing

    The Top 5 Large-Cap Hardware Stocks for 2016

    Learn the top five large-cap hardware stocks that are expected to grow in 2016, with a summary and expected growth opportunities for each company.
  7. Financial Advisor

    How Financial Advisors Are Leveraging Social Media

    As financial advisory clients are increasingly turning to social media, wealth managers who aren't following suit risk being left behind.
  8. Investing

    Dialing Up Telecom ETFs

    Telecom ETFs tempt with yield, but investors need to consider other issues in the sector.
RELATED FAQS
  1. What is the average price-to-earnings ratio in the internet sector?

    Learn what the average price-to-earnings (P/E) ratio is for companies in the internet sector and how the sector is broken ... Read Answer >>
  2. Who Are Google's Main Competitors?

    Explore Google's different revenue segments and its competitors in each, ranging from Microsoft and Yahoo to Moody's Investor ... Read Answer >>
  3. What trends affect profitability in financials?

    Explore the trends that most affect the financial services sector, including the role of central bank policy and challenges ... Read Answer >>
  4. What's normal for profit margin in retail sector?

    Find out the typical profit margin for a major retail company, and learn how it compares to the profit margins for other ... Read Answer >>
Trading Center