Super Micro Stock Crashes Below $30 Support Premarket As DeepSeek Fears Rattle AI Stocks: Retail Sentiment Mixed
Super Micro, which had a tough second half of 2024, hasn't regained its mojo.
FollowArtificial intelligence (AI) server maker Super Micro Computer, Inc.’s (SMCI) stock fell sharply in Monday’s premarket trading amid the tech sector-wide sell-off, triggered primarily by fears concerning the risk posed by China’s DeepSeek large-language model (LLM).
Chinese quantitative hedge fund High-Flyer founder Liang Wenfeng-owned AI startup DeepSeek unveiled its DeepSeek R1, an open-source large-language model, last week. It has created ripples in the market by providing statistics showing its superiority over the models of U.S. tech companies such as OpenAI’s GPT-4o, Meta Platforms, Inc.’s (META) Llama3.1.
More importantly, DeepSeek reportedly claimed its training models used far fewer Nvidia Corp. (NVDA) chips than the ones used by its U.S. rivals.
Super Micro, which had a tough second half of the year in 2024, has never regained its mojo. Accounting issues and delays in filing financial reports with the SEC have all weighed down on the stock, which is trading well off its March 8, 2024, all-time high of $122.90. The stock was removed from the prestigious Nasdaq 100 Index in December, only months after it was included in it.
The DeepSeek threat confounds Super Micro’s outlook further if the Chinese company seeks to disrupt the need for AI servers that the latter manufactures.
Super Micro has another crucial catalyst ahead as it must meet a Feb. 25 deadline to comply with the Nasdaq listing standards in order to remain listed on the exchange.
After ending 2024 with a gain of merely 7% at $30.48, underperforming the broader market and the tech sector. It has risen 9% since the start of the new year.
SMCI sentiment and message volume January 27, as of 6:15 am ET | Source: Stocktwits
On Stocktwits, sentiment toward Super Micro stock improved to ‘neutral’ (46/100) from ‘bearish’ a day ago, with message volume improving to ‘neutral.’
A retail watcher of the stock suggested they would use the slump as a buying opportunity.
Another pinned their hopes on the U.S. government potentially keeping the Chinese LLM at bay.
In premarket trading, Super Micro stock plunged 10.13% to $29.90.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
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