Technology Stocks Fall, but Amazon Shares Boosted by Kindle Fire
Technology stocks saw a sharp decline on the markets yesterday, caused by falling semiconductor shares, but Amazon stock got a predictable boost after it rolled out the Kindle Fire.
Amazon (AMZN) stock rose by 2.5% Wednesday, and closed at $229.71 after the company received a broadly positive reaction to its new anticipated tablet.
The fall of tech stocks was led by Advanced Micro Devices Inc. (AMD), which plummeted by 5.2% to close at $6.15. LSI Corp. (LSI) declined 5.6% to close at $5.44, while SanDisk Corp. (SNDK) decreased 3.3% to close at $41.78.
However, J.P. Morgan analyst Christopher Danely thinks now might not be a bad time to invest in semiconductor stocks. The analyst noted, “semiconductor stocks have bottomed and […] investors should buy before the likely 1Q12 recovery.”
As to why semiconductor share prices are tumbling, Danely added:
“Most investors we met with last week indicated they are waiting for another round of estimate cuts in October and a resolution in the European financial crisis before buying semiconductor stocks.”
If it works as advertised, the Kindle Fire should give the iPad its first serious competition. The new device is slated to challenge Apple’s all-conquering iPad. A $199 price tag for the Kindle Fire places it quite a way below the iPad 2, which usually retails for $499.
The Kindle Fire is a little smaller than its Apple rival, boasting a lightweight body with a 7-inch display. The tablet will use Google’s Android OS, and is due to ship on November 15th.
