Super Micro Computer (SMCI 8.89%) stock is slipping in Tuesday's trading. The server-technology specialist's share price was down 5.5% as of 12:15 p.m. ET, according to data from S&P Global Market Intelligence.
While there isn't any business-specific news pulling Supermicro stock lower today, the company's share price is slipping as investors weigh risks in the artificial intelligence (AI) space. In particular, investors are feeling a bit more cautious about companies in the category after reports emerged today that Advanced Micro Devices will need to secure a special export license for some of its AI processors.
The red-hot AI stock takes a breather
Super Micro Computer stock has been on an incredible run, and it's not surprising to see investors pumping the breaks a bit. Yesterday, the server specialist's stock registered explosive gains and closed out the daily trading session up roughly 19% after it was announced that the company would become part of the S&P 500 index later this month. Today, investors have been left to weigh another ripple in the increasingly complex relationship between the U.S. and China -- and what it means for the rapidly evolving AI space.
Companies including AMD and Nvidia are currently blocked from selling their most advanced AI processors to China. In turn, AMD specifically tailored processors that can be sold in the Chinese market.
Now, it looks like AMD and other advanced processor designers may have another hoop to jump through if they want to do business in the Middle Kingdom. In response, investors are taking a slightly more cautious approach to Supermicro and other high-profile AI stocks today.
What do the politics of AI mean for Supermicro stock?
Access to advanced artificial intelligence technologies has emerged as a vital national security issue. It's also a central point driving rising tensions between the U.S. and China. The U.S. and other Western allies have made moves to limit China's access to advanced processors and semiconductor manufacturing equipment.
It's possible that these developments could limit Supermicro's growth potential in China and some other markets. The company uses Nvidia's processors in its high-performance rack servers, and there is a risk that new regulations could curb some of its business opportunities.
On the other hand, the company generates the large majority of its revenue from U.S.-based customers. Geopolitical relations between the U.S. and China present a broad-based risk for the stock market right now, but Supermicro's business actually looks fairly insulated at the moment.
