However, there's one tech stock that's actually been performing well and appears among those poised for a profitable year ahead, despite some current controversy.
Mobile communications company T-Mobile US (TMUS - Get Report) is hovering around $40 per share, having begun the year at $38.86. On January 8, it reached a high of $41.23 thanks to positive news revealed on a conference call.
TMUS data by YCharts
On the call, T-Mobile reported that it had signed up a net total of 2.1 million new customers last quarter, the third straight quarter in which more than 2 million subscribers were acquired. In total, T-Mobile added 8.3 new customers to its base in 2015. This makes the mobile company the third largest by subscriber count, lagging behind Verizon and AT&T. The company also announced that its profit before standard accounting items will be $7 billion for this quarter.
However, controversy surrounding the carrier's ambitious and successful Binge On program has threatened to derail the stock. And T-Mobile's outspoken CEO, John Legere, hasn't helped matters.
Binge On allows customers to stream videos from sites such as Netflix on their mobile phones without using up their monthly data allowance. T-Mobile also promised to "optimize" video streaming quality.
Because the video hosting sites were not charged to participate in the program, the FCC chairman described the program as being "pro-competitive" and not a breach of net neutrality rules.
However, last week activist group the Electric Frontier Foundation (EFF) accused T-Mobile of "throttling" -- not "optimizing" -- all video traffic to a slower speed, thus disabling high-resolution video viewing. The EFF also called T-Mobile out for hiding this practice from subscribers.
Legere responded with a few profanity-laced tirades against the EFF. This has taken T-Mobile's stock from its high above $41.
Although T-Mobile might be placed under closer scrutiny for its Binge On program, the company still has a lot of potential for at least the coming year, placing it among the tech stocks with the most potential for 2016.
Its wireless coverage may not yet be on par with Verizon, but T-Mobile expanded its 4GE LTE network geographically by 250% in 2015, and it has aggressive plans to continue growing its coverage in 2016.
In addition, T-Mobile is demonstrating an increasing focus on the business market. In 2014, the company launched a channel partner program to expand the reach of its data network for end customers. Under the program, participating carriers provide support to end customers and are paid residual monthly commissions by T-Mobile.
And T-Mobile's business plan, Simple Choice for Business, now offers no annual contracts and competitive pricing, making it an attractive choice for business owners.
T-Mobile also continues to be an M&A target. According to a recent report from Bernstein Research, a merger withSprint could happen. Previous merger negotiations between the two companies were shelved in 2014 after the Obama administration expressed a desire to keep four national wireless players on the market.
However, a new administration in the White House -- be it Democrat or Republican -- would likely be more friendly to a merger. "The prospect of a Sprint/T-Mobile merger -- the only transaction that can materially affect the mobile sector's structure, conduct, and performance -- will remain an overhang throughout most of the year," according to the Bernstein report. And if that were to fall through, Comcast has already been identified as a potential buyer.
Despite the current Internet flame war over Binge On, T-Mobile has a lot of performance potential for 2016. In fact, it could prove to be one of the best-performing tech stocks in the rare year that tech stocks didn't soar.
Despite the current Internet flame war over Binge On, T-Mobile has a lot of performance potential for 2016. In fact, it could prove to be one of the best-performing tech stocks in the rare year that tech stocks didn't soar.
By Kat McKerrow
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