A new inflation report is out, and markets have reacted positively. Headline U.S. inflation essentially stalled in October, while the core consumer price index, which excludes food and energy costs, increased 0.2% from September. Positive indications that inflation is indeed coming down could incite a broader market rally as the year comes to a close. However, not all stocks will benefit from positive macroeconomic news.
Below are three tech stocks, in particular, that have zero hope left for the rest of the year and, perhaps, beyond.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) is a leading wireless technology and semiconductors business I have certainly had varying opinions on in the past. However, the tech giant’s disappointing earnings results this year, coupled with developments in China’s own domestic semiconductor industry, have seriously jeopardized QCOM’s long-term growth potential.
Qualcomm’s quarterly earnings reports have been dismal this year. Its fiscal first, second and third quarter reports all showed declining year-over-year (YoY) revenue, mostly due to falling demand for Qualcomm’s smartphone hardware, including system-on-a-chip (SoC) and wireless products. Moreover, the newly released Huawei Mate 60 Pro has a 7-nanometer SoC design, is manufactured in China and has an in-house modem with 5G wireless speeds. More of these in-house SoCs and modems in China’s homemade semiconductor ecosystem could severely deplete Qualcomm’s advantage in its key market, thereby diminishing any potential growth in its share price.
Ameresco (AMRC)
Ameresco (NYSE:AMRC) provides clean energy technology solutions to renewable energy projects and deploys decarbonization efforts for large corporations, institutions and other organizations. Additionally, the company designs, engineers and installs projects that reduce energy and operations and maintenance (O&M) costs for its customers’ facilities.
Last year, rising energy costs drove demand for Ameresco’s services, resulting in 50% YoY top-line growth. However, the renewable energy company’s shares have not performed well this year. From everything to administrative bottlenecks and long-than-expected downtime periods at certain energy plants to just macro-induced decreased demand for Ameresco’s renewable energy services, Ameresco has seen its revenue decline in every quarter of 2023. The latest earnings report released last week sent shares tumbling nearly 15%. From a year-to-date perspective, shares have fallen a calamitous 51%.
Wolfspeed (WOLF)
Wolfspeed (NYSE:WOLF) designs and fabricates silicon carbide and gallium nitride-based semiconductor technologies for electric vehicles (EV), fast charging and wireless applications. In particular, Wolfspeed uses silicon carbide in its power devices while employing gallium nitride in its radio frequency (RF) devices that help telecommunication infrastructure function.
Secular tailwinds driving consumer demand for EVs had, in turn, increased revenue substantially over the past couple of years. However, 2023 (the company’s fiscal year 2024) has proven to be a difficult demand environment. Also, Wolfspeed is opening up a new facility, which ran into several costs. As a result, the semiconductor firm is far away from bottom-line profitability.
Additionally, EV demand will probably weaken in the near term, making it hard to recommend as the year comes to an end. Shares have already fallen more than 51% year-to-date.
On the date of publication, Tyrik Torres did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
