Updated from 8:31 a.m.

Lehman Brothers

clipped two of old technology's biggest stalwarts --

Intel

(INTC) - Get Report

and

Dell

(DELL) - Get Report

this morning.

The brokerage dropped its fiscal 2001 earnings-per-share estimate on Dell to $1 from $1.10. It also lowered Intel's 2001 estimate to $1.30 per share from $1.40 and its price target to $40 from $55.

And in early trading just after the open, Dell was off 75 cents, or 1.4%, to $17.25. Intel was down 50 cents, or 1.6% to $30.56.

Although the moves don't seem that drastic -- just lowered expectations and a smaller price target rather than a more severe rating change -- the words used to justify them were. Daniel Niles' report discussing Intel's future pulled no punches.

"We believe that PC demand in the last two weeks of December was terrible," he wrote, "leading to lowered expectations for 2001."

And Niles said the future isn't so bright in tech, making broader comments that could affect the entire industry's fortunes, not just Intel's. He said IT spending, a key source of revenue for many tech companies, would grow only 5% to 7% in 2001, much lower than the 10% growth previously expected.

Also, Niles said a price war could very likely be on the horizon, with so many companies sitting on large inventories that must be cleared so new products can enter the marketplace. A price war could lead to lower profit margins.

Niles also slashed at other technology names, cutting a swath through the earnings estimates of

Xilinx

(XLNX) - Get Report

and

Altera

(ALTR) - Get Report

.

Xilinx's 2002 estimates were cut back to $1.55 a share from $1.62. Altera's 2001 estimates were lowered to $1.15 a share from $1.20. Again, Niles didn't mince words.

"We believe that semiconductor stocks in general will hit new lows (including these two) and that even these new estimates could be too high," Niles wrote.