HEXUS.sharewatch: Turning the corner?

It's been a pretty rough ride since we last had a look at the leading technology shares four months ago, but a lot of the blame for that has to be placed at the feet of investment banks.

Back in January we had a look at the paradox of Intel shares taking a kicking. It seemed bizarre that their shares were plummeting when they had just announced huge profits.

But of course stock markets represent the anticipated rather than current value of companies and clearly they were hoping for even greater profits from Intel than they got. There’s no pleasing some people.

A look at the table below reveals that Intel are far from alone, so it’s important to put these figures in the context of the sub-prime meltdown and the utter mess it has made of the West’s banking system, such as it is.

Having said that, the NASDAQ, where a lot of tech companies – including Microsoft and Intel – are listed, seems to have fared worse than the Dow Jones Industrial Average so maybe all the banking scariness was already priced in to the Dow.

Anyway, any company whose share price has declined by less than ten percent in the last four months has probably done well.

All the share prices are in US dollars and are the prices as at close of play on the date stated. The first date represents the last time we looked at them, the second is two months later, the third is the end of last week and the last is close of play yesterday.

The useful exercise is to compare individual companies. Everyone knows AMD has been up against it, so it’s not surprising to see its shares drop by a third since our last HEXUS.sharewatch.

Perhaps more surprising, however, is to see great rival NVIDIA suffer an even greater drop in that time. Not to mention Google, from whose corporate posterior the sun so recently appeared to shine.

If we had to make a sweeping generalisation based on the above figures it would be that those companies with more of a consumer bias have fared worse than those with a B2B emphasis.

The ultimate illustration of this is in the only company to see its shares increase in value over the last four months – IBM. Big Blue washed its hands of all things consumer years ago and that’s now looking like a pretty cunning move.

Avnet is probably the most B2B focused of the three distributors represented and it has fared considerably better than Ingram Micro and Tech Data.

Perhaps now we’re seeing why AMD was apparently willing to risk so much to increase its enterprise market share and why Dell is suddenly so keen to embrace the SMB channel.

Clearly the most action-packed sector to keep an eye on over the next few months is semiconductors. Intel just keeps announcing new products, with Atom being the current apple of its eye, and AMD seems set to have a good go at matching it, at least.

In spite of dominating AMD in the discrete graphics space, NVIDIA's stock seems to be suffering. Maybe this is in recognition of Intel's imminent Larrabee move and the fruition of Fusion - the long promised key product of the AMD/ATI merger. Where does all this leave NVIDIA, investors might be asking.

Elsewhere, the Microsoft/Yahoo thing is still on-going and Google clearly plans to keep moaning about it until it concludes.

Dell's success or failure in its attempts to break into the channel will probably be reflected in its share price, while the prices of the three disties featured could be thought of as a decent barometer of the health of the channel itself.

Finally, an optimistic thought. A number of shares have gained since the end of last week. This could just be part of a general eddy in the markets or maybe it's the start of a more protracted upturn. Let's see.