U.S. equities are back under pressure on Thursday as investors look past the mid-term election results to the approach of what is likely to be another Federal Reserve interest rate hike in December.
Also, whatever hopes there were of some bipartisanship between President Trump and House Democrats seems to be fading after a contentious press conference as well as the forced resignation of now former Attorney General Jeff Sessions.
Key tech stocks are already rolling over, setting the stage for a downside extension as the post-election market rally looks vulnerable to a bout of profit taking.
Here are five tech stocks to avoid:
Facebook (NASDAQ:FB) shares are once again succumbing to selling weakness, persisting in their steady decline below their 20-day moving average. Already down roughly one-third from the highs seen in late July, FB stock continues to be plagued by worries surrounding user metrics and the impact on profitability from an ongoing fight against fake content.
The company will next report results on Jan. 29 after the close. Analysts are looking for earnings of $2.19 per share on revenues of $16.42 billion. When the company last reported on Oct. 30, earnings of $1.76 per share beat estimates by 32 cents on a 32.9% rise in revenues.
One of the more notable tech stocks taking a beating today is Nvidia (NASDAQ:NVDA). NVDA stock is falling down and out of a multi-week consolidation range that capped the late-October rally. Much has changed in the narrative here, from a loss of demand from cryptocurrency mining rigs to falling interest in ultra-pricey graphics cards by gaming enthusiasts amid the availability of high-powered console alternatives like the Xbox One X.
The company will next report results on Nov. 15 after the close. Analysts are looking for earnings of $1.73 per share on revenues of $3.2 billion. When the company last reported on Aug. 16, earnings of $1.94 beat estimates by 10 cents on a 40% rise in revenues.
Twitter (NYSE:TWTR) shares have more or less stalled out above their 200-day moving average, hitting resistance near its late August high. This dip in TWTR stock comes despite a recent upgrade by analysts at Oppenheimer on ad pricing stabilization and favorable expense trends. Aegis Capital also raised the price target recently. But investors remain skeptical of social media stocks here on fears that politicization and regulatory scrutiny will weigh on margins.
The company will next report results on Jan. 24 before the bell. Analysts are looking for earnings of 15 cents per share on revenues of $843 million. When the company last reported on Oct. 25, earnings of 21 cents per share beat estimates by 7 cents on a 28.5% rise in revenues.
Qualcomm (NASDAQ:QCOM) shares are dropping hard following the reporting of disappointing quarterly results on Wednesday. Earnings of 90 cents per share beat estimates by 6 cents on a 2.1% decline in revenues. But forward guidance was weak, sending QCOM stock back down to levels not seen since July. Analysts at Cascend Research and Cowen both highlighted headwinds related to Apple (NASDAQ:AAPL) as well as a slowdown in smartphone sales in China.
The company will next report results on Feb. 6.
Shares of Activision (NASDAQ:ATVI) are down 3.6% in mid-day trading, returning to lows not seen since late last year ahead of earnings. ATVI stock is down by 25% from the highs seen in early October as initial excitement over a battle royale mode for its latest Call of Duty game has given way to a realization that this wasn’t enough to stifle the momentum enjoyed by rivals such as Fortnite and PlayerUnknown’s Battlegrounds.
The company will next report results on Nov. 8 after the close. Analysts are looking for earnings of 50 cents per share on revenues of $1.7 billion. When the company last reported on Aug. 2, earnings of 52 cents per share beat estimates by 20 cents on a 2.3% decline in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.