SMCI Rises And Crashes

I think the AI hype is catching up with momentum and trend traders. Everyone was (is) looking for the next best NVDA opportunity so they latched onto SMCI. Honesty, I have no idea what SMCI does but the market gossip/chatter was that it does “AI” and is into computer hardware.

SMCI came across one of my “all time high after market close” scanners and I checked it out. It was doing pretty well before the “AI bros” got a hold of it and then it went price parabolic. It was going “to the moon” because people thought it had something to do with AI. Hint: It doesn’t.

Price parabolic moves are a big freaking red flag for me. Those price moves usually end with sudden crashes and that’s exactly what happened with SMCI on Friday. Just look at that selloff!

Ironically (or stupidly), BofA analysts upgraded SMCI the day after Valentine’s Day. Lol.

What a bunch of dumbasses. No matter how much voodoo they do with earnings and fundamentals, they upgrade the stock because it was going up. That’s it.

I never put any “stock” into analysts upgrades for this exact reason. No one knows if the stock will go up or down in the short term, no one does. All we can do is watch price action and see what traders and investors want at the moment and trade accordingly.

Buying high and selling high works well provided the hype continues and with all eyes on NVDA’s earnings this week we’ll see if the hype continues for another quarter.

In the meantime, I’m taking profits.