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Investors may not believe in fortune-telling when it comes to picking good stocks, but they are sitting up to listen to an oracle, Oracle Corp, that is. Tech stocks have had their share of ups and downs as the economy has seesawed, but some investors have been able to rely on some giant heavyweights to prosper despite it all. That may not hold true next year, as Oracle Corp.‘s earnings dropped for the first time in 10 years, causing a shock and awe fallout amongst investors. Not soon after the news, Oracle’s stock dropped more than 10 percent, while investors began wondering if this was a hint of future things to come for all technology stocks.

Technology in the Headlights

If a large multinational company is struggling, investors reason, then all technology stocks may be in danger. This might also be a warning that the entire world is about to go into recession, not just the United States. Oracle’s competitors are also experiencing tough times with more warnings being sounded in share prices as names like Hewlett Packard Co., Intel, and Red Hat are issuing poor earnings forecasts. Hardware and software sales are down across the board.

Lower Spending

Companies have gotten stingy with their technology buys, delaying needed upgrades or putting off scheduled maintenance. Some companies are requiring that technology buys be approved by senior executives in the company. Part of the drop in Oracle experienced was from its profitable software maintenance department. Revenues dropped from $4.02 billion in the first quarter to $3.99 billion in the second. Oracle is also predicting that new software sales growth to be anywhere between 0 to 10 percent, compared with a solid 7 percent forecast in years past. Hardware sales dropped 14 percent, and Oracle expects more of a decline in the coming years, anywhere between 5 and 15 percent. As a company that has not disappointed its investors in over a decade, this year’s returns have spooked investors who are making harsh decisions on all their technology stock holdings now.