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While it's true that technology stocks are driving the market rally, not all tech stocks are winners. While the Nasdaq index continues to hit record highs, many of its constituents have fallen hard and underperformed. The reality is that for every winner, like Nvidia (NASDAQ:NVDA) stock, there are plenty of losers dragging down investors' portfolios.
The situation seems to be getting worse following a series of recent earnings reports from tech companies. Shares of several big-name companies have fallen following major earnings misses and disappointing guidance announcements. For investors, these are tech stocks to avoid. Anyone holding these problematic stocks should sell as soon as possible.
Let's take a look at three tech stocks that could fall further.
Blackberry (BB)
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Things are only getting worse for technology company BlackBerry (NYSE:BB). The former smartphone maker turned cybersecurity company reported a nearly 300% increase in its net loss in the first quarter of this year. BlackBerry reported a first-quarter net loss of $42 million, 282% higher than the $11 million net loss a year ago. The latest results showed a loss of 7 cents per share, up from a loss of 2 cents a year ago.
The widening losses come as BlackBerry's sales continue to worsen. The company's revenue for the first quarter was $144 million, down 61% from $373 million in the same period last year. The poor numbers come as BlackBerry prepares to spin off its cybersecurity and IoT divisions. The company is also cutting costs as its financial situation worsens. Earlier this year, BlackBerry cut 200 jobs and closed six of its 36 offices around the world.
Unfortunately, BlackBerry's share price has fallen 50% over the past 12 months and is now trading as a penny stock.
Riot Platform (RIOT)
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Bitcoin (BTC-USD) miner Riot Platforms (NASDAQ:RIOT) is selling off after the company said it was giving up on pursuing rival Bitfarms (NASDAQ:BITF).
Riot Platforms announced that it was abandoning its proposed acquisition of Bitfarms after the company rejected it. Riot executives have said they want to acquire Bitfarms in order to create the world's largest publicly-traded bitcoin miner.
Furthermore, consolidation in the cryptocurrency mining sector has accelerated since Bitcoin's halving in April this year, when the supply of BTC and mining rewards declined by 50%. Riot Platforms is currently engaged in a boardroom battle with Bitfarms and has nominated three candidates to replace the current Bitfarms directors. Specifically, the company is Bitfarms' largest shareholder with a 15% stake, and therefore can propose new directors.
As a result, Riot Platforms executives had previously called for the removal of Bitfarms' interim CEO, Nicolas Bonta. It's unclear how this fight will play out, but the whole situation has weighed on Riot's stock, which has fallen 41% this year and is trending lower.
Micron Technology (MU)
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Data storage company Micron Technology (NASDAQ:MU) lost some shine after issuing forward-looking guidance that was in line with Wall Street expectations. Investors appear to be disappointed, even though the latest earnings showed first-quarter sales and profits beat expectations. Micron's earnings outlook was in line with analysts' expectations, rather than beating them. MU shares fell 7% the day after the announcement.
To be sure, Micron Technology is benefiting from the current artificial intelligence (AI) boom: The company's advanced memory is used in graphics processing units (GPUs) made by companies such as Nvidia. But while Micron's AI business is booming, the company said in its earnings call that its smartphone and personal computer (PC) divisions are struggling amid weak global demand.
Micron Technology Inc., a maker of computer memory and data storage products, said it expects second-quarter earnings of $1.08 a share on sales of $7.6 billion. Wall Street analysts were expecting earnings of $1.05 a share on sales of $7.6 billion. Micron Technology's shares, which doubled last year, fell after the company released the results.
As of the publication date of this article, Joel Bagrol held a long position in NVDA. Opinions expressed in this article are those of the author and follow InvestorPlace.com's publishing guidelines.
Joel Bagrol has been a business journalist for 20 years, including five years as a reporter for The Wall Street Journal and writing for The Washington Post, The Toronto Star, and financial websites such as The Motley Fool and Investopedia.
