What happened

Almost no stock was spared from the market crash today. Major indexes opened the day deep in the red after President Trump last night imposed a 30-day ban on most travel from Europe, and stocks finished even lower as mass closure of events and activities continued. A number of colleges told students to stay at home and take classes online, while corporate offices mandated work-from-home policies. This afternoon, the NCAA canceled its March Madness basketball, Major League Baseball said it would delay the start of the baseball season by two weeks, and Disneyland in California made plans to close temporarily. The S&P 500 lost 9.5%, its worst single-day drop since 1987.

Tech stocks were among the big losers today, including Criteo (CRTO 1.20%), which finished down 15.9%, and CalAmp (CAMP 3.13%), which also gave up 15.9%. Hubspot (HUBS 1.43%) lost 10.8%, and Fortinet (FTNT 2.27%) was off 13.8%. Zebra Technologies fell 15.6%.

A newspaper page with stock charts on it

Image source: Getty Images.

So what

Though all of these tech stocks are profitable, investors still see them being at risk in the spreading coronavirus outbreak, as a recession, which is seeming more likely, would have an effect on all of them.

France-based Criteo was already anticipating a disappointing 2020, forecasting that revenue would fall 10% this year. However, with much of Europe overwhelmed by the coronavirus outbreak, the digital advertising specialist could see a sharp decline in demand for its services. 

CalAmp, the maker of telematics products used for mobile technology, was also experiencing headwinds prior to the recent sell-off. Last week, the company slashed its fourth-quarter revenue forecast from $95 million-$100 million to $85 million-$87 million, due to supply chain-related delays from coronavirus in China and softer-than-expected demand for MRM Telematics products. As the coronavirus slows down business in the U.S., it's likely to delay purchase decisions and hamper demand.  

Cybersecurity specialist Fortinet was in better shape than the two stocks above after posting 21% revenue growth and eyeing 17.6% top-line growth in 2020. The company said earlier that supply chain issues related to the coronavirus could affect its business, and investors seem to believe those chances will increase now. 

Hubspot, a cloud-based provider of customer relationship management software for marketing and sales, essentially fell in tandem with the overall market today. Like with other cloud stocks, investors may be concerned that the SaaS company is overvalued, given the changing economic winds, and as the coronavirus is likely to cool off business demand growth over the near term. Hubspot had tripled over the three years before the recent sell-off.

Zebra Technologies, the maker of automatic identification and data capture equipment like bar-code scanners, caters to a wide range of industries that are likely to be affected by the coronavirus outbreak. Those include retail, transportation and logistics, manufacturing, and hospitality. If its customers see a loss of business, that is likely to translate into fewer sales and slower growth. Meanwhile, the company could also be vulnerable to supply-chain issues related to the coronavirus outbreak in China.

Now what

While some tech stocks have fared better during the coronavirus sell-off, especially those that help enable working from home, tech companies are sensitive to the overall economic climate, especially business spending. With cyclical and consumer industries figuring they're going to get hit hard by the outbreak, spending on software and other tech tools that the companies above represent could see a decline.

We still don't know how long or severe the outbreak will be or what its economic effects will be. Tech stocks, along with the rest of the market, could still fall further as the situation develops and the epidemic tests the strength of the American economy.