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10 ways to trade Intel's drop
Intel, the world's largest chipmaker, on Thursday said first-quarter revenue could be almost $1 billion lower than it previously expected. Investors shouldn't take this news lightly as the fate of every technology company in the S&P 500 (CME:Index and Options Market: .INX) is in some way affected by Intel's outlook on the world, trading history shows.
Since 2005, Intel (NASDAQ: INTC) fell more than 3 percent on 120 days, according to Kensho, a quantitative tool used by hedge funds. On average, all 76 members of the technology sector declined on those days as well, history shows.
This is news to investors as more than half of the sector traded higher in Thursday morning trading, including names like Cisco and Apple. The overall market was higher as well.
But if one believes Intel's outlook sours the investing picture on the technology industry and the many other companies where chip technology is crucial to their operating performance, here are the top stocks to bet against.
The following are the biggest tech stock losers on a day when Intel falls more than 3 percent, as it did on Thursday.
The worst performers on those days, according to Kensho, were Advanced Micro Devices (NASDAQ: AMD), Nvidia (NASDAQ: NVDA), Jabil Circuit (NYSE: JBL), LSI Logic and Lam Research (NASDAQ: LRCX), which each fell, on average, more than 3 percent as well, according to Kensho.
Hewlett-Packard (NYSE: HPQ), Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL) also came under pressure with each falling more than 2 percent on average.
Companies that Intel does business with should come under pressure as well.
According to FactSet, ASML Holdings (Euronext Amsterdam: ASML-NL), Cisco (NASDAQ: CSCO), 3D Systems (NYSE: DDD), ADT (NYSE: ADT) and General Electric (NYSE: GE) are the top partners with the chipmaker.
Despite the Intel link, many of those shares were either little changed or higher in Thursday trading.
Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.
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