SMCI stock just dropped 13%. This could be the reason why

Super Micro Computer, Inc. (NASDAQ:SMCI) stock has experienced a notable pullback today, declining by more than 13% from Thursday’s close. This downturn comes amidst broader movements in the semiconductor sector, influenced by recent reports and guidance from key industry players.

As of 10:50 am ET, SMCI’s stock is down 13.7% at $801 per share.

SMCI stock pulls back from highs

The decline in SMCI's stock value aligns with a broader trend affecting chip stocks. Industry giants like ASML Holding NV (AS:ASML) and Taiwan Semiconductor Manufacturing (NYSE:TSM) have recently provided guidance and reports that have impacted sentiment across the semiconductor market.

Why SMCI stock is down today

While the precise reason for SMCI's sudden 13% drop is not yet known, Investing.com analysts pointed to a likely catalyst for this market reaction.

Today's press release from SMCI regarding an upcoming announcement lacked substantive guidance, focusing primarily on the announcement date itself. This omission is said to have disappointed some investors who were anticipating a positive pre-announcement.

Investing.com analysts noted that SMCI typically includes guidance alongside announcement dates. The absence of such guidance in this instance may have triggered uncertainty and disappointment among investors, prompting a reactionary sell-off and contributing to the decline in SMCI's stock price.

Wells Fargo analysts share that view, highlighting the fact that SMCI did not provide a positive pre-announcement. The bank explained that SMCI has pre-announced its revenue range in seven out of the past eight quarters. Wells Fargo feels the lack of pre-announcement is considered a "key derivative data point for the overall AI trade."

The reaction to today's news highlights the sensitivity of market sentiment within the semiconductor industry. As SMCI prepares for its forthcoming announcement, it is crucial for market participants to closely monitor any further developments or indications that could impact the company's outlook and future performance.

Ahead of SMCI’s results, which are set to be released after the close on April 30, analysts at Loop Capital raised their price target for the stock to $1,500 from $600, maintaining a Buy rating.

“We’re raising our PT to $1500 as we continue to gain confidence in both our net-bullish Gen AI server industry posture (L-T) and SMCI as an increasing leader in the need for both complexity and scale,” said the firm.

Meanwhile, Barclays analysts said they expect a strong print from SMCI. The bank, which has a $961 price target on SMCI, believes the Overweight-rated company's guidance will also be strong, stating it should "easily beat the Street."

Barclays also noted a potential pre-announcement, stating it was impossible to assess the probability of a positive pre-announcement. However, they think the June quarter guidance should be very strong.

"We think March-Q revenue is tracking at the high end of guidance, with the additional variable being the rev rec to determine how much upside there is for March Q vs. June Q, as some of the AI server delivery was towards the end of the March Q," explained the bank. "We estimate June-Q can potentially grow by 30% Q/Q, aided by capacity expansion to 5k AI racks per month as we enter the June-Q."