Wall Street anticipates tech downturn
- Reduce text size Decrease text size
- Increase text size Increase text size
- Print article Print
- Jump to comments Comment
- Share this article Share
- Email article to a friend Email
'Credit-crunch' takes its toll.
According to the Financial Times newspaper, shares in information technology companies are being sold off as analysts predict a cyclical slow-down in corporate IT spending.
John Chambers, CEO of network equipment manufacturer Cisco Systems, predicted unfavourable market conditions for the coming months as he announced the company’s financial results.
“The US enterprise, probably as a surprise to no one, is experiencing some softness,” said Chambers. "We expected the U.S. enterprise [IT] business to be lumpy, and continue to be lumpy," he added.
That triggered a 10% drop in the company’s share value, effectively wiping $19 billion off the company’s market capitalisation.
That triggered similar sell-offs of shares in database and application giant Oracle and data storage provider EMC, each of which dropped 7% in value.
Even the superstars of the technology industry, Google and Apple, dropped 5.3% and 5.8% respectively following Chambers’ gloomy outlook.
The technology industry has so far evaded fall-out from the ‘credit-crunch’ fiasco, but it appears that the knock-on effect is starting to manifest as banking and investment organisations, that were more directly affected, scale down their IT spending plans.
Further reading
Oracle enjoys the spoils of SOA Financial report, October 2007
