Why Semiconductor Manufacturing International, Blucora, and Cray Tumbled Today

Even though the stock market traded within a tight range today, some stocks had some dramatic losses. Find out which ones and why here.

Feb 18, 2014 at 8:30PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Mixed results on Wall Street Tuesday signaled the uncertain among stock market investors right now, as people try to figure out whether the latest rebound from January's modest correction will last or give way to another decline. At least for a few stocks, though, the mood was more dour, as Semiconductor Manufacturing International (NYSE:SMI), Blucora (NASDAQ:BCOR), and Cray (NASDAQ:CRAY) all dropped substantially today despite the relatively flat market.

Semiconductor Manufacturing fell 19% after the Chinese foundry business reported a revenue increase in its fourth quarter of just 1.2% from the year-ago quarter, as earnings fell precipitously. Falling gross margins pointed to the struggles in the semiconductor market recently, and SMI's first-quarter guidance was even less appealing, with expectations for a 5% to 9% drop in sequential revenue and the potential for further margin erosion. With Intel (NASDAQ:INTC) potentially waiting in the wings to utilize its manufacturing capability more profitably, Semiconductor Manufacturing and its foundry peers could soon see an elephant enter the space and make competition a lot tougher.

Blucora fell 8% after the company was the subject of a scathing attack from analysts at Gotham City Research, which made negative comments about the sustainability of its Dogpile and WebCrawler Internet search engines. The report appears to center on the idea that Google should end its relationship with Blucora, and that its TaxACT tax-preparation service provides only minimal protection against a share-price decline. Given the impact of past attacks from Gotham City on other companies, many investors appeared not to want to wait out what could become an extended short attack.

Cray dropped 14%, but it's important to put the move in context as Cray stock soared 39% last Friday. Today's drop erased about half of those gains, but investors remain optimistic about the supercomputer company's past performance and future prospects after its fourth-quarter earnings release. Perhaps the most telling remark was the company's statement that "a wide range of results remains possible," leaving plenty of room for outperformance as well as disappointment.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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