SMCI stock drops below $900. What comes after the support break?
The Super Micro Computer Inc. (NASDAQ:SMCI) stock price has dropped sharply in recent days, falling below the $900 mark premarket Wednesday. Given the stock’s rise over the last year, the decline in SMCI stock has sparked interest and concern among investors.
Super Micro shares are now down almost 19% in the last week, following a 6% fall on Monday and an almost 9% decrease in Tuesday’s session.
The company’s recent public offering plans, which involved selling 2 million shares at a public offering price of $875 per share and an additional 300,000 shares for underwriters, likely contributed to the stock's decline.
Public offering prices are typically lower than the stock's current price, which can be a concern for traders, while the increased supply of stock can also have an impact. Several media outlets reported that Super Micro failed to attract enough investor interest to sell shares at $900-1000, which further pushed the SMCI stock lower.
The decline in shares this week comes after the company was added to the S&P 500 index. The addition of SMCI to the S&P 500 index had initially led to a morning trading increase, but the momentum was quickly lost, resulting in a drop of more than 6% by the close of the day.
It's not all doom and gloom, however. Despite the more recent dip, which has seen it fall from a high of over $1,200 per share, SMCI shares have experienced a significant 854% rise over the last 12 months. Year-to-date, it is up 225.35% due to soaring demand tied to the rise of artificial intelligence (AI).
Analysts had previously expressed optimism about the stock, citing a potential runway for further growth amid the AI boom.
Earlier this month, BofA upped its SMCI price target by $240 to $1280 per share. The
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