Super Micro Computer Inc. (SMCI) experienced a sharp decline of 6.30% during intraday trading on Monday, caught in the midst of a broader selloff in the technology sector that wiped out over $1 trillion in market value from the Nasdaq 100 Index.
The downturn was triggered by concerns surrounding the commercial viability and profitability of artificial intelligence (AI) investments, with semiconductor giants like Nvidia Corp., Broadcom Inc., and Super Micro Computer bearing the brunt of the selloff. Investors expressed apprehensions about the return on investment from substantial AI infrastructure spending, as the payoff may take longer than expected, impacting short-term earnings for tech giants.
Speculation about an AI bubble added to market jitters, fueled by concerns that the commercial potential of AI may be overestimated. There are also growing worries related to the profitability of AI investments amid high infrastructure costs, which could weigh on the bottom line of companies like Super Micro Computer, a leading provider of AI computing solutions.
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