Why Super Micro Computer Stock Is Sinking Today

Source The Motley Fool

Super Micro Computer (NASDAQ: SMCI) stock is falling in Monday's trading. The server specialist's share price was down 5.3% as of 12:45 p.m. ET and had been down as much as 11% earlier in the daily session. Meanwhile, the S&P 500 index was down 0.2%, and the Nasdaq Composite index was down 0.8%.

Supermicro stock is falling today in conjunction with news that the U.S. plans to roll out new restrictions on artificial intelligence (AI) chips. In order to bolster the competitive positioning of America and its allies in the tech category, the U.S. government has said it will put new regulations in place that limit AI chips being exported to countries including China, Russia, Iran, and North Korea.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Supermicro stock falls on AI chip news

White House officials announced today that the U.S. plans to expand restrictions to prevent advanced AI chips and semiconductor manufacturing equipment from being sold to China and other adversarial nations. Access to advanced artificial intelligence hardware and software has become a vital national security interest, and the U.S. is trying to strengthen its position in the space and limit advances for its geopolitical rivals.

Supermicro has become a leading player in the AI server space. It's one of Nvidia's biggest customers, and it uses the AI leader's advanced GPUs as the core hardware component in its high-performance rack servers for AI data centers. The expanded restrictions on AI hardware exports could close off growth avenues for Supermicro, and there are other risks related to regulations and rising geopolitical tensions that investors should consider.

What comes next for Supermicro?

Supermicro has said that it will publish its delayed 10-K report before Feb. 25. With accounting issues and bearish speculation surrounding the server specialist, the company's stock could soar if the report shows that business performance is in line with its previously stated results. On the other hand, the stock could crater if the 10-K filing shows that the company had to issue downward revisions for its previously reported results. But that's not the only potentially major catalyst for the stock on the horizon.

The U.S. has reportedly launched an investigation to determine how Nvidia chips that were banned from being exported to China wound up in the country, and investigators are said to be looking into Supermicro as part of the probe. With AI taking center stage in rising tensions between the two competing world powers, geopolitical dynamics could play a significant role in Supermicro's stock performance.

Should you invest $1,000 in Super Micro Computer right now?

Before you buy stock in Super Micro Computer, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Super Micro Computer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $832,928!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of January 13, 2025

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Bitcoin Price Forecast: BTC extends recovery as ETF records positive flows Bitcoin (BTC) price continues to trade in green above $91,500 at the time of writing on Thursday after rebounding from the key support level.
Author  FXStreet
Nov 27, Thu
Bitcoin (BTC) price continues to trade in green above $91,500 at the time of writing on Thursday after rebounding from the key support level.
placeholder
Bitcoin Takes a 'Major Leap Forward' with $97K Price Targets in SightBitcoin holds steady above $90,000 as traders eye $100,000, buoyed by Thanksgiving market lull.
Author  Mitrade
23 hours ago
Bitcoin holds steady above $90,000 as traders eye $100,000, buoyed by Thanksgiving market lull.
placeholder
S&P Slashes Vanke to Deep Junk, Warning of 'Unsustainable' Debt WallS&P has cut China Vanke’s rating to CCC- and warned its debt is “unsustainable” as the developer faces an 11.4 billion yuan maturity wall, seeks to delay a 2 billion yuan bond repayment and sees its securities plunge, stoking fresh worries that China’s property sector could slide back into crisis despite state ties.
Author  Mitrade
20 hours ago
S&P has cut China Vanke’s rating to CCC- and warned its debt is “unsustainable” as the developer faces an 11.4 billion yuan maturity wall, seeks to delay a 2 billion yuan bond repayment and sees its securities plunge, stoking fresh worries that China’s property sector could slide back into crisis despite state ties.
placeholder
Gold hits two-week top; eyes $4,200 as dovish Fed offsets USD uptick and risk-on moodGold (XAU/USD) attracts fresh buyers during the Asian session on Friday and climbs to a two-week high, with bulls now eyeing to reclaim the $4,200 mark amid dovish US Federal Reserve (Fed) expectations.
Author  FXStreet
19 hours ago
Gold (XAU/USD) attracts fresh buyers during the Asian session on Friday and climbs to a two-week high, with bulls now eyeing to reclaim the $4,200 mark amid dovish US Federal Reserve (Fed) expectations.
placeholder
Silver Price Forecast: XAG/USD bulls remain focused on the $54.40 levelSilver remains steady near $54.00 after rejection at $54.40 area.
Author  FXStreet
16 hours ago
Silver remains steady near $54.00 after rejection at $54.40 area.
goTop
quote