Super Micro Computer (NASDAQ: SMCI) is getting hit with one other round of massive sell-offs Friday. The company’s share price was down 5.5% as of three:15 p.m. ET, in accordance with data from S&P Global Market Intelligence.
Supermicro, as the company is frequently called, saw its stock pull back following one other bearish piece of coverage from an unlimited name on Wall Street. Adding one other source of selling pressure, today’s jobs report from the U.S. Department of Labor arrived with weaker-than-expected results.
J.P. Morgan not has a bullish rating on Supermicro stock
In a report published before the market opened today, J.P. Morgan lowered its rating on Super Micro Computer from obese to neutral. J.P. Morgan’s analysts also lowered their one-year price goal on Supermicro stock from $950 per share to $500 per share. Despite the downgrade, the brand recent goal would still suggest upside of roughly 28% based on the stock’s current price.
J.P. Morgan’s analysts said that the selection to downgrade the stock was in a roundabout way related to the short report that was published by Hindenburg Research earlier this month. As well as they said that the downward revision was not driven by concerns that Supermicro would have trouble getting back into compliance with Securities and Exchange Commission (SEC) regulations, following the delayed filing of its annual 10-K report. Instead, the rating and price-target cuts were driven by a seeming lack of near-term catalysts for brand recent investors to leap into the stock, and concerns about sales and pricing pressures from competition.
The most recent jobs data may be dragging Supermicro stock lower
Investors were attempting to today’s jobs report from the Labor Department for indicators regarding the health of the U.S. economy, and in order that they weren’t comfortable with the outcomes. Analysts and economists had already began to lower their expectations for August’s jobs numbers; the standard estimate was that 160,000 jobs were added last month. Nonetheless the report showed that only 142,000 jobs were actually added inside the period.
The August jobs numbers have added to concerns that the U.S. economy could be heading in the fitting direction for a recession. The Federal Reserve is anticipated to cut rates of interest later this month, which should be a positive catalyst for economic activity, but some observers are anxious it might be not enough to avoid economic contraction. Investors have been attempting to interest-rate cuts as a key bullish catalyst for the stock market, nonetheless the specter of a possible recession has taken the shine off of the Fed’s anticipated policy shift.
In consequence, Super Micro Computer and other growth stocks are seeing outsized sell-offs today. But whenever you’re risk-tolerant, Supermicro stock could be a worthwhile addition to your portfolio.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Idiot has no position in any of the stocks mentioned. The Motley Idiot has a disclosure policy.
Why Super Micro Computer Stock Is Plummeting Today was originally published by The Motley Idiot