With the merger war between Dell (NASDAQ: DELL) and Hewlett Packard (NYSE: HPQ) over 3Par (NYSE: PAR) raging on, tech stocks have really been in focus lately. A spate of merger and acquisition action has prompted a renewed focus on information technology companies, particularly cloud computing stocks.
However, don’t be fooled into thinking that a bunch of big spenders in the technology sector means that all tech picks are doing well. In fact, a number of big name blue chips in the industry continue to face very difficult roads ahead.
Here are 11 blue chip tech stocks stumbling right now:
Microsoft (MSFT)
Industry: Software
Market Cap: $205 billion
Microsoft (NASDAQ: MSFT) is known globally for its Windows operating system. But lately, the tech stock has been known for its declines. The tech giant has dropped -22% in the last eight months, compared to the Dow Jones Industrial Average and NASDAQ, which have fallen -3.4% and -5.8% respectively. Currently, Microsoft is trading right around its 52-week low. Add the fact that experts are estimating a -6.8% drop in growth next quarter and Microsoft is definitely a blue chip stock worth selling.
Cisco (CSCO)
Industry: Communications Equipment
Market Cap: $117 billion
Networking company Cisco Systems Inc. (NASDAQ: CSCO) has had a less than stellar 2010. Since January, the tech company’s stock has slid -14.3%, setting it behind broader markets. Additionally, experts are predicting earnings of $0.40 per share in its next quarterly report, which is down from an EPS of $0.43 last quarter. Up until May, Cisco stock had remained relatively stable on the year. Since May however, the stock has dropped -23.8%. CSCO is trading very close to its 52-week low of $20.36, with its current stock price of $20.45.
Hewlett-Packard (HPQ)
Industry: Computers & Peripherals
Market Cap: $91 billion
Hewlett-Packard Co. (NYSE: HPQ) has been making headlines over its 3Par bids, but none of the press has helped turn around HP stock. The tech giant has seen its stock underperform in 2010 as well. In fact, the tech stock has fallen -24.4% since January, including a -15.4% drop since the beginning of August. The bidding war over 3par could be a double-edged sword – if HP misses out, it could get punished. If it wins and overpays, shareholders may be just as angry.
Qualcomm (QCOM)
Industry: Communications Equipment
Market Cap: $62 billion
Qualcomm INC (NASDAQ: QCOM) is a designer, manufacturer and marketer of digital wireless telecommunications products based in San Diego. Thus far, QCOM stock has slid -17.2% in 2010. Currently the stock is up to $38.29, from its 52-week low of $31.63 in July. Experts are also predicting a growth estimate for the current quarter of -9.4%. Recently, competitor Intel (NASDAQ: INTC) completed the buyout of Infineon’s wireless chip unit, which means competitor QCOM may now be at a disadvantage on the mobile device front.
Taiwan Semiconductor (TSM)
Industry: Semiconductors & Semiconductor Equipment
Market Cap: $49 billion
Primarily engaged in the research, manufacturing and distribution of integrated circuit related products, Taiwan Semiconductor Manufacturing Co (NYSE: TSM) is another blue chip stock worth selling. Since January, the stock has fallen -17.7%, against small declines by the broader markets. Additionally, experts are not predicting growth for the company in the near future, as they have posted a -2.2% growth estimate for next year. The fact that Deutsche Bank has downgraded the semiconductor stock to a “hold” from a “buy” is also discouraging.
Nokia (NOK)
Industry: Communications Equipment
Market Cap: $32 billion
Cell phone maker and communication company Nokia Corp. (NYSE: NOK) has experienced the brunt of the competitive mobile phone market. Year-to-date, Nokia’s stock has vastly underperformed, falling -34% in 2010. Over the past 12 months the company has seen a sharp decline of -39.5%. To make matters worse, Nokia has missed earnings estimates for the past two quarters, causing experts to scale back on their predictions for next quarter, with an earnings estimate of $0.14. A net profit margin of just 1% does not have investors thrilled about Nokia stock either.
Research in Motion (RIMM)
Industry: Communication Equipment
Market Cap: $25 billion
Research in Motion Ltd. (NASDAQ: RIMM) is famous for its signature Blackberry smartphone. Much like competitor Nokia, RIMM has had a rough go of it in 2010. The stock has slid -33.2% in the last eight months and -38.3% over the past year. That represents a loss of nearly $28 per share over a 12 month period. The smartphone market has been unkind to RIMM lately, as competitors Google (NASDAQ: GOOG) and Apple are hitting it big with their Droid and iPhone smartphones. And with a recent report that iPhones are becoming more popular in the office, the corporate staple Blackberry may be out of style.
Dell (DELL)
Industry: Computers & Peripherals
Market Cap: $23 billion
Personal Computer producer Dell Inc. (NASDAQ: DELL) has seen its stock gradually decline nearly -18% in 2010. A shell of its former self, Dell stocks currently trade at $11.70, a -66.7% drop from August of 2005. InvestorPlace recently reported that Dell sales have dropped significantly due to reduced consumer spending, and corporate buying. Locked in a bidding war with Hewlett-Packard for the tech company 3Par, Dell may see its only real chance for revival slip away if HP makes the purchase. A net profit margin of just 3.5% last quarter is another reason why this clue chip tech stock is a sell.
Yahoo! (YHOO)
Industry: Industry Software & Services
Market Cap: $18 billion
Based in California, Yahoo! Inc. (NASDAQ: YHOO) has become a household name thanks to its aptly named website Yahoo.com. Despite the site’s popularity, the company’s stock has seen a drastic decline of -28.9% since mid-April. Year-to-date the stock is down -22.1%, and is just barely above its 52-week low of $13.03, with a stock price of $13.09. YHOO’s stock has been sitting right around that 52-week low price for several weeks, proving that the Internet stock is anything but strong.
Adobe (ADBE)
Industry: Software
Market Cap: $15 billion
Adobe Systems Inc. (NASDAQ: ADBE) is a diversified software company that offers a line of creative, business, web and mobile software and services used by a variety of clients. Adobe’s stock was down slightly through the first six months of 2010, and has seen a sharp drop of -16.4% since mid-June. Year-to-date the stock is down -24.7%, compared to minor declines in the broader markets. Like many of the other stocks on this list, Adobe is not trading much higher than its 52-week low of $26.01. The tech stock currently trades at $27.64.
Activision Blizzard (ATVI)
Industry: Software
Market Cap: $13 billion
Activision Blizzard Inc. (NASDAQ: ATVI) publishes video games for personal computers, gaming consoles and handheld devices. Year-to-date, Activision has seen a modest decline of -4.4%, and a 12-month drop of -8.5%. While Activision’s stock performance has not been awful, shareholders must be disheartened by the performance based on the video-game company’s releases over the past year. In November, Activision released Call of Duty: Modern Warfare 2 which has sold more than 20 million copies worldwide. More recently, Activision released Starcraft II in late July and sold more than one million copies in the first day. Despite huge sales, Activision stock has been treading water for the past year, which must certainly upset stockholders.
As of this writing, Louis Navellier did not own a position in any of the stocks named here.
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