AI stocks suddenly fell sharply. Last week, pressure was placed on two semiconductor manufacturing giants, TSMC and ASML, to be split after falling profits prompted massive sales. In the first five trading days, Arm fell 23%, Supermicro fell 21%, and Nvidia fell 8%.
Does this mean the AI bubble is about to burst, or is it just a temporary phenomenon? no one knows. However, according to financial investment advisory firm The Motley Fool, Huida and Supermicro are likely to continue to fall.
Huida can drop another 20%
Nvidia has been the undisputed leader in the advancement of AI. High demand for AI has driven Nvidia’s revenue to triple in recent quarters as profits grow faster; however, DA Davidson analyst Gil Luria analyzed the stock after Nvidia released its February earnings report and gave it a neutral rating with a target price of $620, meaning it could fall 22 % from Monday’s closing price of $795.18.
Luria acknowledged that Nvidia’s performance is strong and that it has the potential to continue to dominate the AI computing space, but competitors are expected to catch up and Nvidia’s market demand may decline in the next four to six quarters. before us
In fact, both AMD and Intel have launched AI GPUs that differ from Nvidia. However, it is too early to tell if Nvidia will lose much market share. The consensus on Wall Street is that the strong growth trend can continue. If income falls as Luria suggests, at least in some sectors, the stock price will certainly fall.
Super Micro Could Drop 65%
The products of this high-end server manufacturer are particularly suitable for running AI applications.
But not all analysts are optimistic about AMD’s potential. After Supermicro released its financial report in late January, Susquehanna gave the stock a sell rating and a target price of just $250, a full 65% below Monday’s closing price of $717.02.
Susquehanna acknowledged that AI computing has long-term growth potential, but saw some problems with Supermicro’s performance. For example, revenues grew rapidly but gross profit margins declined. Supermicro’s working capital and earnings quality have also been questioned.
If Supermicro’s third quarter earnings report breaks, Friday’s sales could be a sign of bigger problems. If the company misses the guidance it issued at the end of January, investors with high expectations will be disappointed. Despite the data, Supermicro’s stock price is expected to see big moves.
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2024-04-23 06:14:11
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