Why Super Micro Computer, Inc. (SMCI) Went Down on Thursday

We recently compiled a list of the 10 Stocks Drop by Double Digits Mostly Due to Disappointing Earnings. In this article, we are going to take a look at where Super Micro Computer, Inc. (NASDAQ:SMCI) stands against the other stocks.

Wall Street’s main indices suffered a bloodbath on Thursday as overall investor sentiment was weighed down by President Donald Trump’s series of tariffs on goods from other countries.

The Dow Jones dropped by 0.45 percent, while the S&P declined 1.59 percent. Nasdaq, on the other hand, lost 2.78 percent.

On Thursday, Trump threatened to slap EU products with a 25-percent tax, following his announcement on Wednesday of another month of delay for the imposition of taxes on goods from Mexico and Canada.

Ten companies also mirrored wider market pessimism, posting double-digit declines, albeit the drop was predominantly due to dismal earnings performance last year.

To come up with Thursday’s worst performers, we considered only the stocks with $2 billion in market capitalization and $5 million in daily trading volume.

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Super Micro Computer, Inc. (NASDAQ:SMCI)

Super Micro Computer, Inc. (NASDAQ:SMCI) fell by 15.97 percent on Thursday to finish at $42.95 apiece as investors resorted to profit-taking following a surge earlier in the week after meeting the February 25 deadline to keep its position as a listed company on Nasdaq.

In addition, an investment research company gave Super Micro Computer, Inc. (NASDAQ:SMCI) a pessimistic outlook, underscoring concerns about the strength of the business’s competitive moat and ongoing reputation issues tied to accounting concerns.

While Barclays acknowledged SMCI’s leadership position in the artificial intelligence industry, it said the company bears too much risk to give it a ‘buy’ rating.

In its delayed filing, Super Micro Computer, Inc. (NASDAQ:SMCI) said sales in fiscal year 2024 more than doubled to $14.99 billion year-on-year on the back of growing demand for its products to support artificial intelligence.

Earlier this month, Super Micro Computer, Inc. (NASDAQ:SMCI) said revenue could hit $40 billion in fiscal year 2026 after reaching $23.5 billion to $25 billion in 2025.

Overall SMCI ranks 4th on our list of Thursday’s worst performers. While we acknowledge the potential of SMCI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as SMCI but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.