Success – this trade made money on 19 April 2024 after investors bailed out of Supermicro
Supermicro makes large servers. They do not command the same market share as HP or Dell. They survived a Bloomberg hit piece a few years ago which falsely claimed a Chinese supply chain attack with weak evidence.
- Buying started mid January on strong sales reports
- Recently joined the SPX
- SMCI has risen around 300% in just six months (AI hype train + momentum in tech)
- AI GPUs need servers to live in, so NVDA action is bullish for server manufacturers
- Retail FOMO explains a lot of px movement in NVDA / AMD but SMCI is not a household name and the bullish trend is unexplained.
- Their servers are not trash – they have good products but they’re not an AI company
- Why hasn’t Equinix stock shot up too? Servers need to be hosted somewhere…
Trade: short SMCI, exit at $770, stop loss at $1160, hedge NDX futures
I am bearish NDX and therefore very bearish tech stocks that don’t make sense.