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Super Micro Computer Inc (NASDAQ:SMCI) shares are trading lower by 2.6% to $612.66 during Monday’s session, pulling back after gaining some 16% last week. The stock surged last week following the release of unexpectedly strong U.S. retail sales data for July, which indicated a 1% month-over-month increase, significantly above the anticipated 0.3%.
The PPI report revealed last week also showed a smaller-than-expected increase in producer prices. Specifically, the headline PPI rose by only 0.1% in July month-over-month, compared to June’s 0.2% and below the anticipated 0.2%.
This cooling in inflation suggests that the Federal Reserve might be inclined to cut interest rates more aggressively. Lower interest rates mean reduced borrowing costs for companies like SMCI, which can benefit from cheaper financing for expansion and operations.
The stock also gained last week after it was revealed Soros Fund Management in its SEC Form 13F filing purchased 24,898 shares of Super Micro Computer.
What Happened: The July retail sales report highlighted a 1.6% rise in spending at electronics and appliance stores, a category closely related to Super Micro Computer’s core business of providing high-performance server and storage solutions.
This uptick suggests increased consumer and business demand for technology products, which bodes well for companies like Super Micro Computer that supply the infrastructure needed to support such growth.
SMCI shares have gained 116% on a year-to-date basis amid demand for AI-related products and services.
Read Also: Why FuboTV Stock Is Trading Higher
By now you're likely curious about how to participate in the market for Super Micro Computer – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
In the the case of Super Micro Computer, which is trading at $605.03 as of publishing time, $100 would buy you 0.17 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
According to data from Benzinga Pro, SMCI has a 52-week high of $1,229.00 and a 52-week low of $226.59.
Posted In: SMCI
