We recently published a list of AI Stocks Dominate Wednesday’s 10 Worst Performers. In this article, we are going to take a look at where Super Micro Computer Inc. (NASDAQ:SMCI) stands against other AI stocks that dominate Wednesday’s worst performers.
Wall Street’s major indices ended in the negative territory on Wednesday as investors parked funds to minimize risks from the resumption of trade war among the world’s largest economies, with a fresh round of tariffs scheduled to be implemented next week.
The tech-heavy Nasdaq fell the hardest, down 2.04 percent, followed by the S&P 500, down 1.12 percent. The Dow Jones declined by 0.31 percent.
According to President Donald Trump, all vehicles made outside of the US would be slapped with a 25-percent tariff.
The broader market downturn spilled over into 10 companies—predominantly AI stocks—further dampened by a cautious outlook on the industry. In this article, we listed Wednesday’s 10 worst performers and detailed the reasons behind their drop.
To come up with the list, we considered only the stocks with $2 billion market capitalization and $5 million in trading volume.
A team of technicians in a server room, testing and managing the newest server solutions.
Super Micro Computer Inc. (NASDAQ:SMCI)
Super Micro fell for a third straight day on Wednesday, shedding 8.86 percent to close at $37.04 apiece as investor sentiment was dragged by sour comments on the general Artificial Intelligence industry coupled with an investment banking firm’s rating downgrade for the company.
At the HSBC Global Investment Summit in Hong Kong, Alibaba (NYSE:BABA) Chairman Joe Tsai warned investors about the ongoing bubble in AI.
“I’m still astounded by the type of numbers that are being thrown around in the U.S. about investing into AI,” he said. “I think in a way, people are investing ahead of the demand that they’re seeing today, but they are projecting much bigger demand.”
Meanwhile, Goldman Sachs lowered its stock rating for SMCI to “sell” from “neutral” previously, amid heightened competition in AI servers, margin pressures, and valuation concerns.
It also reduced its price target for the company by 20 percent to $32 from $40 previously, which was 13.6 percent lower than the company’s closing price on Wednesday.
Overall, SMCI ranks 9th on our list of AI stocks that dominate Wednesday’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.
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