One by one the sacred tech growth stocks are getting taken out and shot. The stocks of companies that have admitted to seeing near-term weakness (or provided disappointing guidance)–AAPL, CSCO, et al–are down 30% from their highs. The stocks of companies that have said “We see nothing!”–IBM, INTC, HPQ–are down 20%. This sets up an almost lose-lose proposition for Hewlett Packard’s earnings today.
If HP sticks with the same refrain as last quarter–no weakness here!–the stock will likely jump modestly in a relief rally…until investors conclude that the company just hasn’t seen the weakness yet. If HP breathes word one about “caution” or “delayed spending,” meanwhile, the stock will likely instantly join brethren AAPL and CSCO in the 30%-down tank.
Big tech companies don’t exist in their own hermetically sealed economies, and the same macro forces that are affecting Cisco and Apple will likely affect IBM, HP, and Intel, too. The most pressing question about today’s call, therefore, will be what, if anything, HP has to say about this.
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