Super Micro Computer (SMCI) stock experienced a significant drop on Friday after failing to provide preliminary results alongside the announcement of its upcoming quarterly earnings report date. This unexpected move by the data-center computer specialist triggered a big sell signal, causing SMCI stock to plummet below a crucial support level.
The San Jose-based company, known as Super Micro, disclosed that it plans to unveil its fiscal third-quarter results on April 30 following the market close. Surprisingly, unlike previous quarters, Super Micro did not offer an early glimpse into its financial performance.
As a result of this development, SMCI stock tumbled 18% to 757.51 during morning trading. The sharp decline led the stock to break below its 50-day moving average line – a significant support level – in above-average trading volume. SMCI stock had previously managed to hold above this level amidst recent market fluctuations.
Currently, Super Micro stock is trading 19% below its 10-week moving average, with even a 2% deviation indicating a sell signal for a long-standing winner. Earlier in the year, on January 19, SMCI shares soared by 35.9% to reach 423.36 after releasing preliminary results alongside its fiscal-Q2 earnings report date, leading to a subsequent peak at 1,229 on March 8.
Super Micro’s success has been attributed to investments by hyperscale cloud service providers in servers for artificial intelligence applications. The company’s stock was recently added to the S&P 500 index.
In the past ten quarters, Super Micro typically shared preliminary results when announcing its quarterly earnings date – a practice it skipped this time. Analysts are anticipating Super Micro earnings of $5.84 per share on sales of $4.01 billion for the fiscal third quarter ending on March 31, reflecting substantial year-over-year growth in both earnings and sales.
SMCI stock is currently featured on two influential IBD stock lists: Big Cap 20 and Tech Leaders. In IBD’s computer hardware industry group, Super Micro holds the top position.
For more stories on consumer technology, software, and semiconductor stocks, follow Patrick Seitz on X, (formerly Twitter), at @IBD_PSeitz.
