Why is Supermicro stock down 20% on Friday?

By:
on Apr 19, 2024
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  • Super Micro Computer announced the date of its Q3 earnings on Friday.
  • Analyst says investors may have read a lack of guidance as a negative.
  • Wells Fargo analyst continues to see upside in Supermicro stock to $960.

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Super Micro Computer Inc (NASDAQ: SMCI) is down close to 20% on Friday after revealing the date on which it plans on reporting its financial results for the third quarter.

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What’s happening with Supermicro stock today?

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The artificial intelligence servers company will publish its quarterly earnings report on April 30th.

Supermicro stock is down sharply at writing because investors may have read a lack of guidance this morning as in fact a “negative”, as per Aaron Rakers – a Wells Fargo analyst.

The investment firm currently rates $SMCI at “equal weight”.   

It’s worth mentioning, however, that Super Micro Computer is expected to report a significant increase in its per-share earnings to $5.67 in Q3 related primarily to a continued focus on AI. The Nasdaq-listed firm earned $1.42 per share in the same quarter last year.

Is $SMCI worth buying on the weakness?

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The recent hit to Supermicro stock may be related to its semiconductor peer ASML that topped Street estimates for its first quarter this week but issued a rather muted guidance for the future.

ASML now forecasts its sales to come in at $6.33 billion in Q2 versus analysts at $6.89 billion and $7.72 billion that it reported for the same quarter last year.  

Still, the weakness in $SMCI may be an opportunity to buy a quality name at a deep discount considering Aaron Rakers of Wells Fargo continues to see upside in the AI stock to $960.

That suggests a more than 25% upside in Supermicro shares from here.

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