Here’s Why Apple and Google Shares Got Crushed
Forget about cloud computing for now, these companies have more pressing concerns to deal with –and they’re taking a toll on Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) shares. The short-term selling pressure seems to be related to the stock techincals for these tech (NYSE:XLK) heavy weights. Apple closed under its 200-day moving average for the first time in recent history. Google broke under $500 today for the first time since September 2010.
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Here’s some fundamental news which pushed the stocks down in the first place:
1) Search Engine Ad Revenues Are Down: Google shares hit a nine month low Friday, largely due to this report detailing how companies are getting sick of poor returns on investments in Search Engine Marketing initiatives. One analyst commented, “Retail, auto, consumer electronics and technology appear weaker than expected, but finance has been solid.” Retail paid search spending is up 15-20% YoY but still fell under market expectations, which is driving the drop-off in stock price.
2) Demand for Tech Products Swoons: As evidenced by price deterioration in chips stocks, such as Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:BRCM), there are speed bumps for companies which make the things at the core of tablets and mobile devices. This comes as a result of news that the tablet market is underperforming initial Wall Street expectations. Besides Apple iPads, competing products such as woeful RIMM’s PlayBook just aren’t selling very well.
3) Patent Battles: Yesterday Apple (NASDAQ:AAPL) reached a settlement with Nokia (NYSE:NOK), agreeing to pay the dwindling smartphone maker $1 billion in cash over the course of the year to resolve patent litigations. In another ongoing legal battle, Google (NASDAQ:GOOG) is looking to scoop up a slew of technology patents from Nortel’s garage sale of over 6,000 protected items, having previously entered a $900 million bid. However the company now looks to be facing competition, as Intel (NASDAQ:INTC), Apple, Ericsson (NASDAQ:ERIC), and RPX (RPXC), are all looking to make bids of their own.