The PMC-Sierra File

Operations

Business: Develops high performance semiconductor networking products

2000 Revenue: $667 million

2000 Earnings Per Share: $1.05

Stock Snapshot

52-Week Range: $57.75 - $255.50

Percentage Change from Jan. 1: 21.9%

Market Cap: $15.3 billion

Source: Morningstar. Performance through Jan. 25.

Your gunslinging tech fund was galloping back to life after a lousy year 2000, but it probably got bucked off its favorite horse Friday.

Last night, networking chip shop

PMC-Sierra

(PMCS)

,

announced fourth-quarter earnings that met Wall Street analysts' expectations. But the company said fat inventories and sagging demand would slice its first-quarter earnings to just 13 cents to 15 cents a share, compared with the 37 cents analysts expected. The Campbell, Calif.-based company's shares closed at $74, down $21.83, or almost 23 percent on Friday. A slew of analysts

downgraded the stock, dragging other fund manager favorites like

Cisco Systems

(CSCO) - Get Report

and

Juniper Networks

(JNPR) - Get Report

down with it.

On Friday morning

TheStreet.com

noted that the stock was a core holding in many tech and growth funds, and a closer look at the numbers underscores that point. At the end of last year, the stock was held by one in two tech funds and by more than 400 stocks overall, according to

Morningstar

. In sum, mutual funds hold a whopping 34% of the firm's shares outstanding. For comparison, mutual funds own 18% of Cisco.

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If you own a tech fund, this might be why it's taking a hit. If you own shares of PMC-Sierra, fund managers' flagging loyalty is probably steepening its shares' slide today.

It's easy to see why fund shops wrapped their arms around the firm's shares. Designing networking chips for fast-growing folks like Cisco has been, to say the least, a sweet spot of the tech sector. Over the past three years, PMC-Sierra's shares averaged a 124.8% annual gain, dusting the

S&P 500

by more than 110 percentage points. The stock was up nearly 22% this year, prior to Friday's tumble. The average tech fund was up 8.8% this year through Thursday's close, after losing more than 30% last year, according to Morningstar.

Climbing PMC- Sierra

Source: Morningstar. Performance through Jan. 25.

On a list of the 10 funds with the biggest bets on the stock, you'll find several high-profile growth managers, including Kevin Landis (

(TVFQX)

Firsthand Technology Value/

(TLFQX)

Firsthand Technology Leaders), Jim McCall (

(MAFOX) - Get Report

Merrill Lynch Focus Twenty), as well as Jim Oelschlager and Donna Barton, who run the

(POGSX) - Get Report

Pin Oak Aggressive Stock fund. Each of these managers' tech-heavy funds has ridden pricey fare like PMC-Sierra to steep gains and losses.

The 44.9% five-year annualized return Landis has rung up with the Firsthand Technology Value fund is second only to the

(DRGTX) - Get Report

Dresdner RCM Global Technology fund out of the entire fund universe, according to Morningstar.

Given some aggressive growth and tech-fund managers notorious reluctance to hang on to shares of companies entering a blue quarter, it might not be too surprising if they are dumping their shares. Some, in fact, may have started reducing their stake earlier this month when Cisco, another top holding in many growth funds, announced that its first quarter

might be murky. No doubt some growth managers connected the dots, seeing a cold for Cisco, one of PMC-Sierra's biggest customers, as impending pneumonia for the chipmaker.

Mutual funds and institutional investors' reaction to the news will have a lot to do with how the stock holds up this year. At the end of the third quarter, the most recent data available, the five-biggest institutional investors in PMC-Sierra were fund shops that held some 22% of the company's shares, according to

bigdough.com

, a Web site that tracks institutional stock ownership.

Fund Junkie runs every Monday, Wednesday and Friday, as well as occasional dispatches. Ian McDonald writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

imcdonald@thestreet.com, but he cannot give specific financial advice.