The most important earnings season for tech since the dot-com boom went bust is about to begin, but don’t expect a holiday miracle, especially for the companies that are used to a victory lap at this time of year.

The first round of quarterly earnings every year is normally an exuberant time for tech companies, which get to show off how many devices they put under Christmas trees, how many ads for those goodies they sold, or services that will be enjoyed on the new iPhones, PCs and more. This earnings season, though, comes in the wake of a huge fourth-quarter decline for tech stocks, as forecasts for the holiday season sparked concerns about the death of huge growth rates that have propelled tech companies to previously outsize valuations — the most serious challenge the current tech boom has faced.

The one bright spot from the bloodletting at the end of 2018 is that expectations have been diminished, leading Wall Street to expect slower revenue and earnings growth. With much more subdued results now expected for many tech companies, strong growth is likely to be rewarded and slowing growth may not be punished as harshly as it was late last year. As was the case last quarter, all companies will likely be judged more on their outlook than their past results, as investors try to get a handle on where the tech boom will go from here.

For more: You should be worried about tech stocks, and here’s why

In general, financial analysts expect a mixed bag from tech this quarter that goes against what we would expect from the holiday season. The biggest growth is expected from companies focused on the corporate sector and internet advertising, while consumer-focused hardware could drag the overall results down. Those expectations show investors must break tech into different sectors, instead of trying to view it as a monolith that moves as one.

“Unfortunately, people lump tech all in one group, they say tech is good or bad,” said Daniel Morgan, a senior portfolio manager at Synovus Trust Company in Atlanta.

The S&P 500 index helped in this regard last year by splitting some large tech companies away from the sector largely referred to as tech, to show the differences between the companies. The interactive media sector — which was created last year and comprises Google parent Alphabet Inc.

GOOG, +0.77%

GOOGL, +0.74%

Facebook Inc.

FB, +1.17%

, Twitter Inc.

TWTR, +1.28%

and TripAdvisor Inc.

TRIP, +1.01%

 — saw revenue soar 25.8% and earnings surge 42% in the fourth quarter of 2017. Wall Street still expects massive sales growth to continue in fourth-quarter results this year, with revenue expected to increase 46.4%, but earnings are only expected to grow 8.5%, dragged down by Facebook’s hefty spending on combating issues of data privacy, security and breaches.

In 2017, companies that make up the S&P 500 index’s IT services sector, the bulk of tech companies, saw revenue growth of 11.5% and profit growth of 22% in the fourth quarter. This year, the Street expects single-digit revenue growth of about 5.4% from the IT group, and 8% earnings growth, according to FactSet.

“To me, the consumer is kind of tired out,” said Morgan, adding that he is looking for better results from companies focused on selling tech to businesses, especially in cloud computing. He is expecting double-digit growth of about 10% in enterprise software overall, and cloud computing to grow about 22%, versus semiconductors, “which are probably looking at a negative growth rate.” He pointed out that at the tail end of earnings last quarter,

CRM, +1.80%

Workday Inc.

WDAY, +3.30%

 and even Hewlett Packard Enterprise Inc.

HPE, +2.87%

had strong results and guidance.

The most prominent consumer tech company, Apple Inc.

AAPL, +0.62%

already signaled that it will not boost revenue growth with its huge earnings warning earlier this month, when Apple said it expects a massive revenue shortfall of billions of dollars in its normally robust December quarter. Apple cited a big slowdown in China for the iPhone’s slowing demand, due in part to the continuing trade war between the U.S. and China. It’s also highly likely that Apple’s high-end pricing model has hit a limit in China, where the average annual income was around $11,000 in 2017.

More from Therese: Apple lives up to Wall Street’s fears with massive revenue shortfall

Apple’s travails also included an admission that in some developed markets, iPhone upgrades also “were not as strong as we thought they would be.” With fewer carrier subsidies, consumers are not as willing to pay full price for a smartphone that now starts at $749 for the lowest-end iPhone XR.

Other data shows that the PC market saw unit sales fall 4.3% in the fourth quarter, largely due to a chip shortage from Intel Corp.

INTC, +1.49%

which had ramifications throughout the industry. PC makers also had pent-up demand for some systems. Memory-chip maker Micron Technology Inc.

MU, +5.55%

 said in mid-December that its customers were building up too much inventory of memory chips.

Semiconductor stocks in general “have officially entered downturn territory,” said Stacy Rasgon, a Bernstein Research analyst, in a note late last week. Many chip companies are seeing revenue slow, some of it due to tariffs on Chinese goods, or due to uncertainty because of the tariffs and the malaise in the global economy. This quarter, outlook will again be key for insight as to whether the current downturn will be swift or slow, but Rasgon said investors are now nervous that more cuts to estimates and spending loom ahead.

“But with further pockets of weakness potentially emerging, Apple’s significant preannouncement, the potential remaining for further external/geopolitical shocks (China trade/tariffs/‘policy-by-tweet’ etc.) to impact demand, we shall see,” Rasgon said. “Thus, sector controversies have shifted to magnitude/duration, with worries over further cuts to come.”

Texas Instruments Inc.

TXN, +1.93%

 was an early chip maker to call out the downturn and investors hope for more insights on overall demand trends when the company reports Jan. 23. TI has a big customer base in the automotive and industrial sectors. The other highly anticipated chip earnings will be coming from Intel, after a report by Bloomberg that the chip giant may try to name a new CEO to replace Brian Krzanich before it reports on Jan. 24, after more than six months with Robert Swan, its CFO, at the helm as an interim boss.

Opinion: The chip slowdown is real, but how bad will it be?

Other chip makers worth paying close attention to include Advanced Micro Devices Inc.

AMD, +2.57%

which reports Jan. 23, and Nvidia Corp.

NVDA, +3.43%

AMD and Nvidia are hoping to gain some share from Intel in the corporate data center as a way to help fuel more growth, and investors will be waiting for more data. Nvidia was hit by a big drop in cryptocurrency mining that overloaded its sales channel last quarter, and suffered more jitters in December about a shortfall in its graphics processing units.    

The likely bright spot in the quarter is expected to again be cloud computing, with strong results at Azure and AWS helping power Microsoft Corp.

MSFT, +1.50%

 and Inc.

AMZN, +0.18%

 , respectively.

This earnings season is likely going to be a bit of a reversal from the normal holiday-sales results, where consumer buying helped fuel a big finish to the year. This time, the cloud may take that starring role away, and the consumer companies that failed to draw in consumers are in danger of even more punishment on Wall Street.

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