Super Micro Computer (SMCI) stock took a nosedive of over 22% to $723.50 late in Friday’s trading session. The semiconductor and server software company is facing its worst day since August 9, 2023, when it plummeted by more than 23%.
The reason behind this sharp decline remains a mystery, as there have been no recent corporate filings from the San Jose-based company. The sell-off began during Friday’s premarket after Super Micro Computer announced that it would be releasing its third quarter fiscal 2024 results on Tuesday, April 30.
With no positive pre-announcement this time around, traders are speculating about the upcoming earnings call. The market seems to be concerned about the lack of guidance and is bracing for potentially disappointing results.
The sell-off is not isolated to SMCI, as other tech stocks like Nvidia (NVDA), Arm Holdings (ARM), and Advanced Micro Devices (AMD) have also experienced significant declines on Friday. Some are even suggesting that the artificial intelligence bubble that has boosted SMCI stock may be bursting.
Analysts had previously set a $1,500 price target for SMCI, and expectations for the upcoming earnings call include $5.76 in adjusted earnings per share on $3.94 billion in revenue.
As SMCI stock breaks through the lower bound of the Bollinger Bands, it appears to be on a downward trajectory. Traders are advised to wait for the Relative Strength Index (RSI) to dip below the oversold level of 30 before considering entry points in the $686 to $709 support window.
Overall, the market is eagerly awaiting Super Micro Computer’s earnings report to shed light on the reasons behind the stock’s dramatic decline.