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Cloud has gloomy day on LinkedIn, Tableau results

It's a dark day for the cloud.

Following grim outlooks from LinkedIn and Tableau Software, which are each down by more than 40 percent Friday, 13 other U.S. software companies plunged by at least 10 percent and another 15 or so dropped by 5 percent or more.

Newly public companies that have yet to turn a profit are getting crushed, with New Relic down 23 percent, and HubSpot and Zendesk each off by 20 percent.

While LinkedIn is the bigger and more notable of the two companies that reported on Thursday, analysts said comments from Tableau are punishing the broader market. Christian Chabot, CEO of the data visualization software company, warned of "some softness in spending, especially in North America."

Tableau forecast first-quarter revenue of $160 to $165 million, trailing the $179.5 million average analyst estimate, according to Thomson Reuters. Prior to Friday, Tableau was up 164 percent from its 2013 IPO. Now it's up only 37 percent.

"This is the first time we have heard a high-quality enterprise software name cite a slowdown in I.T. spending," said Matthew Hedberg, an analyst at RBC Capital Markets who has a buy rating on the stock. "There is a belief among investors that this could foreshadow other high multiple names getting nailed in the first quarter."

Cloud plunge

Company Friday drop
Tableau 48%
LinkedIn 42%
New Relic 23%
Zendesk 20%
HubSpot 20%
Workday 16%
NetSuite 15%
Qlik 14%
Demandware 13%
Salesforce 13%
Source: FactSet

It's not uncommon for mega-cap companies like Cisco and Intel to drag down their respective sectors when they show disappointing results, but Tableau is significantly smaller than many of the companies that are dropping.

Salesforce.com, for example, is eight times bigger than Tableau and sells a much wider suite of products. Yet shares of the software vendor plunged 13 percent today. Among the other big decliners: Human resources software provider Workday is down 16 percent and business management software developer NetSuite sank 15 percent.

LinkedIn's 42 percent plunge is by far its steepest drop in its five years as a public company and wiped away almost $11 billion in market value.

The business social network forecast 2016 revenue growth of 20 percent to 22 percent, while analysts were projecting 30 percent expansion.

Among LinkedIn's concerns is the global economy.

"In terms of more of the macro or the global sentiment, we are cognizant of the uncertain environment today," CFO Steven Sordello said on Thursday's conference call. The Asia and European regions "exited weaker, and so we're factoring that into guidance."