Updated from 1:21 p.m. EDT

The earnings season has just begun but tech investors have seen enough.

Dour financial reports from

IBM

(IBM) - Get Report

and

Sun Microsystems

(SUNW) - Get Report

, two broad technology hardware vendors, helped drop the

Nasdaq Composite

to its lowest level in six months on Friday.

Next week holds more uncertainty as the pace of earnings season accelerates with

Intel

(INTC) - Get Report

,

Texas Instruments

(TXN) - Get Report

,

Qualcomm

(QCOM) - Get Report

and

Juniper Networks

(JNPR) - Get Report

all reporting financial results.

"This has been a difficult, trying time so far," says Scott Curtis, managing director of trading at Kinetics, a money management firm. "I think a lot of people were still hoping that some of the bellwether tech names from a few years ago could still lead the way or show some glimmers of positive news, but so far they haven't."

Indeed, IBM said late Thursday that it will rely on

cost-cutting to hit its full-year earnings target, as sales won't be as robust as hoped. Shares of the

Dow

component dropped 8.3% to $76.79, their lowest level in two years.

Other companies this week have painted a similar picture. Sun said it is trying to spur sales, but the recovering company

missed its financial targets for its just-completed quarter.

ASML

(ASML) - Get Report

, the world's third-largest chip-equipment vendor, said it doesn't see a recovery happening later this year. Chipmaker

AMD

(AMD) - Get Report

unexpectedly

reported a loss earlier this week due to oversupply and intense competition for flash memory, a situation that prompted AMD to

bail out of the flash memory business entirely.

And this is only the first week of earnings season.

"We're still in the midst of this and it will be a few more weeks until we know how it all turns out," Curtis says.

Much of the selling Friday was not so much about how poorly the first quarter turned out, but how it turned out so poorly. IBM said business through the first two months of the year was on track, but deteriorated significantly in the final two weeks of the quarter. This could mean trouble for the second quarter. "It's too early to tell if it's part of a broader trend," said IBM CFO Mark Loughridge.

Investors had not wanted to acknowledge this concern until now. The tech sector has been awash the last few months in hopes of a better spending environment during the second half of the year. Now that thesis is in jeopardy.

Semiconductor analyst Chris Chaney with Stanford Group doesn't see it that way and says stocks still can rebound in the second half of the year as long as the economy doesn't completely fall apart. He says IBM's and Sun's problems were due more to their services businesses -- as opposed to problems with hardware. AMD's flash woes weren't a big surprise, and ASML's selling difficulties are partially due to the fact that it sells the most expensive machines in a semiconductor factory.

For now, he says portfolio managers are likely to wait out the rest of April before entering or returning to the chip sector. Chaney predicted modest guidance for the second quarter out of the chip sector and a seasonal uptick in sales in the back half of the year.

"Summertime is not a very exciting time to invest in semiconductors, but this slide really presents a good opportunity to look at owning some chips and adding to portfolios because the damage is done," he says. "This sets us up nicely for gains and a good performance in the second half of the year."

That remains to be seen as many of the largest tech companies still have yet to offer their perspectives on the first quarter and the rest of the year.

Oh, and here's another data point for investors to consider: Gartner announced Friday afternoon that corporate demand for PC shipments around the world in the first quarter was weaker than expected and

Dell's

(DELL) - Get Report

global growth rate fell below 20% for the first time in two-and-a-half years.