Tech stocks may struggle in 2011

This week has been pretty brutal in regards to tech, the market leaders were slammed this week. AAPL, FFIV, GOOG, RVBD, INTC, and others may have a rough year going forward. AAPL had monster earnings this past quarter and despite that report the stock dropped 15 points off its 52 week high, of course this can be attributed to the news of Steve Jobs sudden medical leave announcement but we will have to see if investors come to their senses and buy the stock and sit on it until it hits 400 which it may by April. Now the reason I believe tech stocks will have meager earnings this year is simple, over valuation and the absence of social networking stocks.

We all know about the private placement of Facebook by Goldman Sach's which may ultimately force an ipo for the online behemoth but until then we won't have a) new breed of tech to lead us into the next decade from an investing stand point b) a sector that can ultimately spread positive earnings through out the tech industry much like how the above aforementioned have. Tech works in sync with each other much more than any other sector, the industry is so intrictly connected that if one company does sour it hurts the whole nasdaq.

Now touching on the over valuation, we have to leave established companies such as AAPL and GOOG out of this conversation but if we look at these stocks P/E ratios, just the slightest dip in expected earnings (which we saw with FFIV this past week) will crush the stock.

-FFIV p/e=58.68

-RVBD p/e=241

-AMZN p/e=73.70

-BIDU p/e=86.96

Those are just a few stocks which remind me of the over valued dotcom stocks of the late 2000s (read the intelligent investor it will blow your mind the valuation of these stocks). If these stocks report lack luster earnings they will refall I guarantee you which is exactly why I am straying away from these stocks. 2011 may prove that these stocks are over valued and a correction in tech may come a float. Touching on my earlier comment this could roll over into all of tech through out 2011, all I ask for is continued earnings at sustained growth.