Super Micro Shines In Q1 As S&P 500’s Only Computer Hardware Gainer, But Retail Is Yet To Regain Confidence
Artificial intelligence server maker Super Micro bucked the downtrend seen among large-cap computer hardware stocks and ended the quarter with a gain of 12.3%.
FollowIt was a challenging first quarter, with large-cap computer hardware stocks underperforming not only the broader market but also the wider tech sector.
However, artificial intelligence (AI) server maker Super Micro Computer, Inc. (SMCI) bucked the trend and ended the quarter with a gain of 12.3%.
On the other hand, storage devices manufacturers Seagate Technology Holdings plc (STX) and Western Digital Corp. (WDC) lost 1.6% and 10.3%, respectively.
Computer and peripherals manufacturers HP, Inc. (HPQ) and Dell Technologies, Inc. (DELL) were down a steeper 15.1% and 20.9%, respectively. Data infrastructure company NetApp, Inc. (NTAP) retreated 24.33% and computing networking company Arista Networks, Inc. (ANET) lost nearly 30%.
Seagate and Western Digital shares came under pressure amid fears of solid-state drive (SSD) disrupting the space and signs of slowing cloud growth. Dell and HP were stymied by lackluster worldwide PC demand and tempered artificial intelligence (AI) server demand outlook.
Super Micro, although up this year, trades down about 49% from the $66.44 level, which the stock hit on Feb. 14, and 72% lower than the all-time high hit on March 8, 2024.
The stock started the year on a bearish note, weighed down by the accounting issues and fears of a potential delisting due to the non-filing of financial reports.
It began to pick up momentum in early February, thanks to a few product updates, and the uptrend continued amid the second-quarter business update in which the company issued a positive revenue outlook for the fiscal year 2026.
Super Micro met the Feb. 25 Nasdaq deadline and became current with its financial reports.
However, the broader market weakness proved contagious, with Super Micro moving in lockstep and sliding through early March. Since then, the stock has been moving roughly sideways.
On Stocktwits, retail sentiment toward Super Micro stock has turned to ‘bearish’ (36/100) from the ‘neutral’ mood that prevailed a day earlier. The message volume dropped off to ‘low’ levels.
SMCI sentiment and message volume, as of 4:39 a.m., April 1 | source: Stocktwits
The negative sentiment toward the stock was largely predicated on the impact of Trump tariffs and counter tariffs by the rest of the world.
The Koyfin-compiled average analysts’ price target for the Super Micro stock is $52.48, implying a 53% upside potential from the last close.
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