Advanced Micro Devices, Inc. (AMD) and Super Micro Computer, Inc. (SMCI) were seemingly at the forefront of a microchip stock sell-off on Wednesday, 1 May 2024 after publishing disappointing financial results.
Chip Stock Sell-off After Disappointing AMD And Super Micro Results
AMD’s GAAP quarter-over-quarter revenues dipped by 11% and, according to Reuters, SMCI’s revenue dropped by 16%. Super Micro Computer’s stock jumped by 150% earlier this year and outstripped Nvidia Corporation (NVDA) (the frontrunner in the chipmaking sector) gains at certain times.
Queries about a new range of servers contributed to the bleak SMCI Q3 performance for the 2024 fiscal year. With its slump, AMD lost more than $21bn in market value and its $4bn sales forecast for this year did not meet the expectations of analysts.
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It seems that these financial announcements instigated a domino effect as Nvidia’s stock fell by 5.7%, Micron Technology, Inc.’s (MU) by 2.9%, and Marvell Technology, Inc.’s (MRVL) by 3.6%. Reuters cited the president of Hackmann Wealth, Russell Hackmann, who said:
As the market is shifting more towards risk-off over the last couple of days, it’s not shocking that unless these companies are beating earnings by a mile that some of the hot air is coming out of them for now.
According to executives from AMD and Super Micro Computer, supply limitations handicapped attempts to optimise the capital relating to demand for AI hardware. Reuters reported that many analysts are still optimistic about AMD and believe that if the company overcomes supply issues, then it may yet occupy prime space in the AI semiconductor market.
