Although the plunge in oil prices and China's stock market dominate the headlines, new developments this week show another key leg is faltering — technology stocks.
Nasdaq is down more than 10 percent for the month, on pace for its worst monthly performance since October 2008, during the financial crisis. The Market Vectors Semiconductor ETF is down more than 12 percent year-to-date. Both are tracking significantly worse than the general market.
Intel dropped more than 8 percent Friday after reporting weaker than expected data center segment sales and financial guidance. After taking account of the $400 million revenue benefit from the recent Altera acquisition, Intel's first quarter forecast was lower than historical seasonality norms.
"This outlook represents a soft start to the year, as we remain cautious on the level of economic growth, particularly in China," Intel's chief financial officer Stacy Smith said on the earnings conference call Thursday, according to a FactSet transcript.
Intel's disappointing news follows the market research firm IDC's report Tuesday, which stated 2015 was the worst annual decline for PC shipments in history.
It's not just the computer business that is fading. The vaunted smart-phone business is starting to sputter too.
Best Buy disheartened technology investors looking for an end-market bottom Thursday, when it announced weaker-than-expected holiday sales. The largest electronics retailer reported a domestic comparable sales decline of 7.2 percent year-over-year in the computing and mobile phones segment, during the nine weeks ending Jan. 2.
Analog Devices, a key component supplier for Apple's iPhone, revised lower January quarter revenue guidance Thursday from its previous forecast of $805 million to $855 million to a new range of $745 million to $765 million.
The company blamed, "weaker than forecast customer demand in the company's portable consumer business unit, which began in December, and is expected to continue into the second fiscal quarter."
As computer and smartphone chip fundamentals worsen, investors should stay cautious on companies reliant on the sectors. Here are tech stocks investors may want to avoid.
