(Updated from 10:20 a.m. EST)

Many technology companies are like twins with special powers -- hit one and the other will feel it. The pain found on Intel's balance sheet caused a great throbbing across the market landscape, shaking the very foundation of the tech world.

Microsoft

(MSFT) - Get Report

was hit by

spillover from the warning, since both blue-chip components are linked by the floundering personal computing sector. Intel supplies the microprocessors for these guys, while Microsoft provides software and operating systems.

Over at

Robertson Stephens

, analyst Alex Baluta wasted no time in cutting back his estimates on Microsoft, dropping his 2001 earnings per share target to $1.77 from $1.82. He maintained his long-term attractive rating on the stock, but cited Intel's weakness along with weak online advertising and the potential of a European slowdown as major factors in the call.

Goldman Sachs'

Rick Sherlund said that Intel's preannouncement will raise eyebrows about Microsoft's quarter. And although he made no changes to his rating and estimates for the company, he did illustrate the incestuous nature of the technology field. When major companies warn, the damage is rarely isolated.

"Our estimates may still be a bit high, but the stock appears resistant to our somewhat moderate revenue estimate reductions," he wrote. "Our $6.2 billion estimate could be closer to $6.1 billion, if we were to presume even slower server growth, (implied by

Oracle's

(ORCL) - Get Report

preannouncement), even weaker advertising revenues, (implied by

Yahoo's

(YHOO)

preannouncement), and slower PC growth, perhaps implied by Intel's

preannouncement ."

And

ING Barings

analyst George Godfrey cut his 2001 earnings estimate on Microsoft back to $1.80 from $1.82 -- bringing his estimate in line with current Wall Street forecasts. He maintained his buy rating and an optimistic view on Mr. Softee's stock.

"However," he wrote, "if the economy rebounds, we believe upside to these estimates does exist."

Misery loves company. And Microsoft was not alone.

Bear Stearns

analyst Charles Boucher attempted to gauge the fallout from the Intel warning in a long note to investors that examined at total of 19 different companies in industries ranging from handhelds to semiconductor equipment.

Intel's mention of weakness in Europe was the most troubling thing that Boucher saw. The analyst said that the further deterioration in foreign markets could hurt the bottom line at

Sun Microsystems

(SUNW) - Get Report

,

EMC

(EMC)

,

Hewlett-Packard

(HWP)

and

IBM

(IBM) - Get Report

. He specifically mentioned that Big Blue could be due for an earnings shortfall.

"Intel's comments about continuing weakness in PCs spreading into the networking, server and communications markets in all geographies does heighten the risk of an earnings shortfall at IBM," he wrote. "With the broader and deeper information technology slowdown... there is risk to our numbers."

Boucher expressed some concern about handhelds like

Palm

(PALM)

and

Handspring

(HAND)

, but not all the news was bad. On the good news front, he said that semiconductor equipment makers, like

Applied Materials

(AMAT) - Get Report

,

Novellus Systems

(NVLS)

and

Lam Research

(LRCX) - Get Report

, will be unaffected by Intel's warning, since the company said it will continue to spend aggressively on research and development.

Chipmakers felt the fury from Robbie Stephens. Analyst Eric Rothdeutsch trimmed his estimates on

Advanced Micro Devices

(AMD) - Get Report

, cutting his 2001 earnings target to $1.50 a share from $1.90 a share -- much lower than current Wall Street consensus of $1.82 a share. His 2002 target was cut to $1.90 from $2.15, also lower than the consensus estimate of $2.22.

"Intel, last night in its preannouncement conference call, indicated that the slowdown seen over the last few quarters in the PC market has spread to its non-PC-related businesses," he wrote. "Namely, sever, cell phone and networking products across all sectors and geographies."

AMD makes flash memory, an important component used in cell phones. As a result of Intel's falloff in its flash memory products, Rothdeutsch followed suit and adjusted his estimates accordingly. But, he maintained a buy rating on the company and said AMD's only real weakness was in flash memory. He believes that AMD is gaining market share for its Athlon processor against Intel's popular Pentium brand.

SG Cowen

examined the effect on the PC market, calling

Compaq

(CPQ)

the most exposed company among the names it tracks. According to the brokerage, which has a neutral rating on the company, Intel provided 14% of Compaq's fourth-quarter revenues. It was followed by

Dell

(DELL) - Get Report

, with 9% of its fourth quarter revenues from Intel, and Hewlett-Packard, which derived 4% of first-quarter revenues from its fellow blue-chip.

"In all of these cases," the brokerage wrote to clients, "we have assumed weakness in the current quarter, although the Intel comment suggests that the softness may be more pronounced than we had assumed."