SMCI Stock Tumbles Below $50 on Investor Skepticism – $40 Next As AI Hype Unravels
Super Micro Computer (NASDAQ: SMCI) is once again under pressure following a brief October recovery, as the stock declines due to weak...
Quick overview
- Super Micro Computer's stock has resumed its decline after a brief recovery, dropping nearly 7% recently and losing 13% over the past two weeks.
- The company's disappointing Q2 2025 earnings report revealed weaker revenue and margins, leading to a significant loss of market value.
- Renewed fears of competition, particularly from Alibaba's AI chip development, and concerns over internal financial governance have intensified selling pressure.
- Technical indicators suggest that if the stock falls below the $50 level, it could decline further towards the $40 support region.
Super Micro Computer (NASDAQ: SMCI) is once again under pressure following a brief October recovery, as the stock declines due to weak fundamentals and waning interest in AI.
Reversal After a Fleeting Recovery
Super Micro Computer’s stock has resumed its downward trajectory after a temporary rebound earlier this month. Shares plunged nearly 7% on Wednesday, deepening a 13% loss over the past two weeks, as investors turned increasingly cautious about slowing revenue growth and mounting competition in the AI hardware market.
After a disappointing Q2 2025 earnings report, SMCI’s valuation has been steadily eroding. The results revealed weaker revenue momentum, tightening margins, and underwhelming earnings, leading to one of the stock’s sharpest single-day drops this year—erasing nearly 30% of its market value.
SMIC Chart Daily – Support Is Under Attack
Earlier optimism faded quickly as SMCI failed to sustain its recovery from $42 to $58.77, and selling pressure intensified once the price slipped below the crucial $50 level. Analysts warn that a break beneath this threshold could accelerate declines toward the $40 region, a key support from earlier in the year.
Competitive Pressures and Governance Worries
The recent drop was amplified by renewed fears of competitive threats. Reports in late August that Alibaba was developing its own AI inference chip rattled investors, sparking worries that SMCI could lose share in the rapidly expanding but crowded AI infrastructure market.
In addition to competition, concerns over SMCI’s internal financial reporting have resurfaced, prompting questions about transparency and governance. The combination of market saturation, slowing sales, and governance doubts has driven a persistent wave of selling despite the broader optimism surrounding AI technology.
Technical Breakdown Fuels Bearish Momentum
From a technical standpoint, SMCI’s slide below the 20-day simple moving average (SMA) marks a key bearish signal. The stock is now testing the $50 level, and analysts note that sustained weakness could push it to $40, especially given the negative sentiment across AI and semiconductor stocks.
SMCI’s market capitalization has fallen to $30.6 billion, and traders see little evidence of buying momentum to stabilize the decline in the short term.
Conclusion: Fragile Confidence and Fading Hype
Super Micro Computer’s steep losses reflect broader exhaustion in the AI trade, as investors grow skeptical of lofty valuations amid slowing growth. Unless SMCI delivers a meaningful turnaround in its fundamentals, the stock risks sliding further—mirroring the cooling sentiment across the once red-hot AI hardware sector.
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