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
Gold Price Forecast: XAU/USD gains momentum to near $3,650, eyes on US CPI releaseThe Gold price (XAU/USD) gains momentum to near $3,645 during the early Asian session on Thursday.
Author  FXStreet
Sep 11, Thu
The Gold price (XAU/USD) gains momentum to near $3,645 during the early Asian session on Thursday.
placeholder
Meme Coins Price Prediction: Dogecoin confirms uptrend, reviving Shiba Inu, PepeMeme coins are on a bullish rebound, with Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE) leading the way.
Author  FXStreet
Sep 11, Thu
Meme coins are on a bullish rebound, with Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE) leading the way.
placeholder
Charlie Kirk’s Death Becomes a Crypto Flashpoint With ‘Justice’ TokensThe launch of new tokens following headline-making events is not new in the crypto market.
Author  Beincrypto
Sep 11, Thu
The launch of new tokens following headline-making events is not new in the crypto market.
placeholder
Forex Today: US Dollar finds support ahead of consumer confidence dataThe US Dollar stabilizes following Thursday's decline as market focus shifts to the University of Michigan's (UoM) preliminary Consumer Sentiment Index data for September.
Author  FXStreet
Sep 12, Fri
The US Dollar stabilizes following Thursday's decline as market focus shifts to the University of Michigan's (UoM) preliminary Consumer Sentiment Index data for September.
placeholder
AUD/USD refreshes 10-month high near 0.6670 amid upbeat market sentimentThe AUD/USD pair posts a fresh 10-month high near 0.6670 during the European trading session on Friday.
Author  FXStreet
Sep 12, Fri
The AUD/USD pair posts a fresh 10-month high near 0.6670 during the European trading session on Friday.
goTop
quote