Super Micro Computer Inc (NASDAQ:SMCI) shares fell 4.64% to $32.23 Wednesday following the Federal Reserve's December meeting.
Growth-focused companies like SMCI are particularly sensitive to interest rate changes, as higher borrowing costs can dampen investment in technology infrastructure.
What To Know: The Fed lowered the federal funds rate by 25 basis points to a range of 4.25%-4.5%, marking its third consecutive cut. However, the updated economic projections signaled a slower pace of rate reductions in 2025, with only two additional cuts expected. The Fed also raised its inflation forecast, projecting core PCE inflation at 2.5% in 2025, up from 2.2% in September.
The prospect of sustained higher rates adds pressure on companies like SMCI, with customers who often rely on favorable financing conditions for large-scale IT projects. Additionally, higher inflation could squeeze margins as operating costs rise.
The broader tech sector also faced selling pressure, amplifying SMCI's decline. The company's performance remains tied to macroeconomic trends, with investors reassessing growth prospects amid a slower-than-expected path to monetary easing.
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How To Buy SMCI Stock
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 $32.23 as of publishing time, $100 would buy you 3.1 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 $122.90 and a 52-week low of $17.25.
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