Super Micro Computer Stock Is Falling Tuesday: What's Going On?

Super Micro Computer Inc SMCI shares are trading lower Tuesday after the company announced a proposed public offering.

What Happened: Super Micro has announced the launch of a proposed underwritten registered public offering of 2 million shares of its common stock. The company expects to grant the underwriters a 30-day window to buy up to an additional 300,000 shares.

The news comes as the stock has rallied more than 250% since the start of the year, largely driven by the company’s positioning in the AI space.

After the market close on Monday, Super Micro announced new AI systems for large-scale generative AI featuring Nvidia Corp’s NVDA next-generation of data center products.

The company also announced the Supermicro SuperCluster solutions portfolio, aimed at accelerating the deployment of generative AI. The SuperCluster solutions are expected to provide foundational building blocks for both the present and the future of large language model infrastructure.

See Also: Nvidia ‘1-2 Steps Ahead of Competitors’ After Blackwell GPU Reveal At GTC 2024, Analyst Says

Should I Sell My SMCI Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Shares of Super Micro have gained 724.94% year to date. This compares to the average annual return of 196.09%, meaning the stock has outperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. Super Micro Computer stock currently has an RSI of 29.98, indicating oversold conditions.

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SMCI Price Action: Super Micro shares were down 10.7% at $894 at the time of publication, according to Benzinga Pro.

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