Is This the Recession's Next Tech Victim?

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Ford and General Motors may have the headlines now, but the recession has hit tech almost as hard. Among the recent losers:

• Akamai (Nasdaq: AKAM), which cut jobs and may also be cutting prices.
• Cisco (Nasdaq: CSCO), which is betting its future on a four-part turnaround plan.
• Yahoo! (Nasdaq: YHOO), which is being pressured by investors to sell its search business to Microsoft (Nasdaq: MSFT).

Now you can add hard drive maker Seagate (NYSE: STX) to the list. At this week's Barclays 2008 Global Technology Conference, executives lowered fourth-quarter revenue guidance to $2.3 to $2.6 billion. Seagate had previously expected $2.85 billion to $3.05 billion, The Wall Street Journal reports.

Reuters, meanwhile, says that Seagate will shutter some facilities for the holidays to save money. CEO Bill Watkins didn't try to spin the news. "We actually had a pretty decent October and we started seeing the pullback about in the second week of November," Watkins said. "There is a lot of fear out there. I don't think anyone is very comfortable about where they are."

And yet our 120,000-strong Motley Fool CAPS community is comfortable betting on Seagate:

Metric	Seagate
CAPS stars (5 max)	*****
Total ratings	852
Bullish ratings	810
Percent Bulls	95.1%
Bearish ratings	42
Percent Bears	4.9%
Bullish pitches	142
Bearish pitches	5

Note: Data current as of Dec. 11, 2008.

"Seagate is down and disk drives have lost favor. Seagate is so savvy that when Flash equals or overtakes hard drives -- Seagate will acquire one or more of the ailing flash players and win," wrote CAPS All-Star GreatDruid last week.

I'll add that, judging by its historic levels of free cash flow, Seagate should be able to sustain its 9.40% dividend yield, offering a rare margin of safety to tech investors who've become used to cold comfort.

But that's my take. I'm more interested in what you think. Would you buy Seagate at these levels? Would you go short? Let us know using by signing up for CAPS today. It's 100% free to participate.

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