Specifically, Seagate (STX) and VMWare (VMW).

Both got hammered last night following their earnings reports.  VMWare and Seagate were both flying on the premise that "cloud computing" was the "savior of the world", and that both virtualization and of course ever-expanding storage requirements come with this premise.

But the guidance -- and the conference calls -- were full of hemming and hawing on forward expectations. 

Seagate, interestingly-enough, was trading at a P/E of five before this happened, and they pay a 4% yield!  To get hammered for roughly 6% on "softer guidance" is either a gross over-reaction or it presages a top in the "virtualization and cloud" meme.

VMWare says, by the results, it's the second.

Now do realize that VMWare had a P/E of about 58 (!) before the report, and that the company did beat on both the top and bottom line.  But the earnings call and forward guidance did not lead to confidence in the future, and stock prices look at forward expectations.

My view is that the entire "cloud" game has been radically oversold, just as the tech meme was in the late 1990s.  Yes, there is a business there, but (1) the economies of scale aren't nearly what people make them out to be, (2) the risks are under-appreciated and dangerously so for many enterprise applications and (3) this has resulted in utterly ridiculous forward expectations that will resolve in the southerly direction for the stock price of related firms.

I know this is a contrarian view, but this is my set of expectations given my experience in the tech world.  Simply put we are again living in a dreamland when it comes to tech, where valuations don't matter, actual earnings don't matter and indefinite exponential growth is again being sold to investors as the way the world works.

It's a lie this time just like it has been every other time, leaving the only real question "has recognition occurred and the collapse yet begun?"

Disclosure: No position in either company.