Super Micro offers investors a bit of relief after stock's worst month on record

By Emily Bary

The popular AI play was the biggest S&P 500 loser for the month - with Moderna, Intel and Dollar General among the other poor performers

Super Micro Computer Inc.'s stock thudded to its worst monthly performance on record - and an unenivable position as the S&P 500's biggest loser for August.

As recently as Aug. 6, Super Micro shares (SMCI) ranked as the best year-to-date performer in the S&P 500 SPX, which they joined only in March. Shares were up 117% over the course of 2024 at that time - but now, they clock in as only the 13th-best performer, up 54% on the year.

But the server maker offered a bit of relief to investors after Friday's close - confirming it plans to delay its 10-K filing as a board committee assesses internal financial controls, but saying that the eventual 10-K is not expected to show material changes to the company's results for the latest fiscal year. Shares were up 2% in Friday's extended session.

The company saw its stock soar earlier this year as it benefitted from rapidly growing demand for artificial-intelligence infrastructure. That growth is still strong, but Super Micro has fresh challenges now - including margin pressures highlighted in its recent earnings, as well as the prospect of issues with its financial reporting.

See also: Super Micro gave a whopping revenue forecast. Here's why that's not enough.

Super Micro's stock lost 2.5% on Friday, cementing a 37.6% monthly decline. That was the stock's worst monthly performance ever, exceeding the 37.4% drop seen in August 2010.

Shares touched above $1,200 in intraday March action but now hover just south of $440.

The stock tumbled 20% on Aug. 6 after the company's earnings made some analysts wonder if its products had become more commoditized as competition grows. The stock lost 19% on Aug. 28 after Super Micro said it planned to delay its 10-K filing while looking into its financial-reporting controls. Short seller Hindenburg Research had flagged accounting concerns in a report a few days prior.

Super Micro said in its Friday afternoon filing that the review of financial controls comes "in response to information that was brought to the attention" of its audit commitee.

The company was joined on the list of monthly S&P 500 losers by shares of vaccine maker Moderna Inc. (MRNA), technology peer Intel Corp. (INTC) and a smattering of challenged retailers. The table below shows the index's worst performers as of Friday's close, according to FactSet data.

   Company                                        Ticker symbol  August MTD percent change 
   Super Micro Computer Inc.                      SMCI           -37.6% 
   Moderna Inc.                                   MRNA           -35.1% 
   Dollar General Corp.                           DG             -31.1% 
   Intel Corp.                                    INTC           -28.3% 
   Walgreens Boots Alliance Inc.                  WBA            -22.1% 
   Dollar Tree Inc.                               DLTR           -19.0% 
   Charles River Laboratories International Inc.  CRL            -19.0% 
   Bath & Body Works Inc.                         BBWI           -16.3% 
   Airbnb Inc.                                    ABNB           -15.9% 
   Etsy Inc.                                      ETSY           -15.4% 

Moderna shares have been under pressure this summer as the company's latest results indicated sluggish COVID-19 vaccine trends and low uptake. Meanwhile, there are concerns about the Moderna's pipeline, with the COVID-19 vaccine and its RSV vaccine being the company's only approved products. While Moderna hopes to develop cancer vaccines, those are a while away, and there's nothing new immediately on the company's horizon. Shares were off about 35% over the course of August.

Intel's stock recovered some ground Friday, but still places among the worst performers of the month. The semiconductor company is cutting jobs, suspending its dividend and otherwise seeking to contend with tough business conditions. Intel has an ambitious strategy to become a manufacturer for other chip companies, but that's a costly bet at a time when its existing businesses aren't seeing the same benefits from artificial intelligence as those of some other industry players. The stock was off about 28% in August despite its sharp Friday rally.

In the retail sphere, notable August losers included shares of Dollar General Corp. (DG), down about 31%, and Dollar Tree Inc. (DLTR), off 19%. Dollar General indicated a "financially constrained" customer base when it reported earnings earlier this week, as shoppers have had trouble making their budgets last to the end of the month.

Then there's Walgreens Boots Alliance Inc. (WBA), with its stock currently the S&P 500's biggest year-to-date loser. It had a difficult August, off about 22% and trading at 1996 levels. One problem for the company is that Pfizer Inc. (PFE) and Eli Lilly & Co. (LLY) are making it easier for customers to get prescriptions sent directly to them. Walgreens is also dealing with similar consumer-spending pressures as other retailers.

See more: Pfizer follows Eli Lilly's lead in direct-to-consumer push

Airbnb's (ABNB) stock has struggled as well in August, highlighting how budget constraints are seeping into the travel sector following a period of postpandemic industry strength. Deutsche Bank's Lee Horowitz mentioned "contracting booking windows as a result of a more challenging macro environment" as one factor behind the home-rental company's disappointing third-quarter outlook issued earlier this month. Shares were down 16% in August.

Read: Airbnb's warning on U.S. demand may 'further stoke the soft-consumer thesis,' analyst says

-Emily Bary

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08-31-24 0543ET

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