Let's start by noting that it's a lot more fun to see catastrophic implosions rendered in smooth, flicker-free 3-D on your computer monitor than it is to read about them in press releases from companies in your portfolio. On the other hand, things could be worse. When's the last time you saw a tech stock drop a mere percent or two -- or even go up -- after revising quarterly revenue guidance downward by a whole 17%? If you're watching the action for graphics chip maker ATI Technologies (NASDAQ:ATYT), how about today?

Slow sales and a low-end mix in the desktop computer biz combined to produce this big revenue whiff, and it will be accompanied by weak gross margins, made even weaker by a big old inventory writedown in the $60 million-$70 million range. I fully expect the final truth -- to appear in the upcoming October conference call -- to be uglier still, if only because of the indelicate dancing that management did to avoid being pinned down on yesterday's conference call.

If you think the vacillations at CPU makers AMD (NYSE:AMD) and Intel (NASDAQ:INTC) are too much, you'll hate the graphics chip business. I'll just say this straight out: It's not a place for investors with weak stomachs. This chart should explain why.

It might also explain why I don't like either ATI or main rival (and Motley Fool Stock Advisor pick) NVIDIA (NASDAQ:NVDA) as long-term stocks. The two are so busy pounding each other and fending off competition to their ancillary businesses that neither delivers the kind of consistent upward-trending performance I look for in a portfolio mainstay. They miss a product cycle or two, they get creamed. They come back, rinse, and repeat.

That's why I think risk-tolerant investors who pay attention to the ebbs and flows can make money by buying either of these geek cyclicals when they're despised by the street. And you might be seeing a bit of that right now with ATI. The road might be bumpy, but ATI does have a lot going for it, including a survivor's balance sheet, new management, and upcoming rollouts of both the ATI-powered Microsoft (NASDAQ:MSFT) Xbox 360 and a next-generation line of PC graphics cards. That suggests to me that ATI is turning the corner, or getting close to that point. As you'll note below, I've invested my own bucks accordingly.

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Seth Jayson uses both NVIDIA and ATI graphics cards. At the time of publication, he had shares of ATI Technologies but no position in any other company mentioned. View his stock holdings and Fool profile here. Fool rules are here.