Tech Stocks Continue Downward Spiral
- By Scott Bekker
Technology stocks continue doing their version of the limbo -
“how low can you go?” - and the answer seems to be that nobody knows.
It’s not just dot-coms, either, that are feeling the heat.
Two industry leaders -- Microsoft and Intel -- were ducking their heads lower under
that limbo pole Thursday.
Intel, citing cancellations of large orders from customers worldwide, said
it now expects sales to be flat or barely above or below the $8.7 billion it
recorded last quarter. Intel had earlier estimated that fourth-quarter revenue
would be up between 4 and 8 percent.
That announcement followed a stinging analysis of Microsoft by Wall Street
analyst Rick Sherlund of Goldman Sachs, who lowered his estimate of Microsoft’s
fiscal 2001 earnings per share from $1.91 to $1.88. This had the net effect of
dropping Microsoft’s stock price more than 6 percent.
Sherlund based his estimate on a belief that PC sales, at least in the U.S.,
were going to slump, leading to fewer sales of Windows on those PCs. He did,
however, keep his “market outperform” rating on Microsoft stock.
These announcements, along with bad news for other industry leaders like
Motorola, Apple and Gateway, sent the Nasdaq reeling again. The tech-heavy
Nasdaq Composite lost 43.84 points, or 1.57 percent of its total value, on
Thursday. -- Keith Ward
Scott Bekker is editor in chief of Redmond Channel Partner magazine.