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Tech Stocks Face Real Trouble

Originally published on April 8 at 6:49 a.m. EDT

When people say "tech" on TV, it is almost always followed with "cheap," or "low valuation." To which I say, "So what?" AMDAMD looked cheap until last night. MotorolaMOT looked cheap and there turned out to be no there there. CiscoCSCO looks cheap but all I hear are earnings cuts. DellDELL looks cheap, but who cares?

Lots of cheap out there.

Here's my question: Where's the catalyst?

Shorts? Stronger growth in the second half? No, the only catalysts I look for in tech are product cycles, and other than Salesforce.comCRM (nice move there), Research In MotionRIMM and maybe AppleAAPL, because we need a new phone there already, there are no new product cycles to speak of.

Layer on the fact that RIMM has a product cycle and had a great quarter and is below where it traded at its high after the quarter -- can you imagine where that would be if the market were to turn down? -- and you can see that tech may be cheap for nobody knows how long.

When that happens, you get a chain reaction when the market turns bad. Suddenly you have MicrosoftMSFT thinking about overpaying, at least that will be the scuttlebutt. You have Hewlett-PackardHPQ going down because AMD says things are weaker. You have IntelINTC going down because AMD's not going bankrupt. You have Freescale on the cover of Business Week making it clear that there won't be any deals from this sector any time soon. Next you will have GoogleGOOG head down on a slowing ad story from some other company.