Yesterday shares of $SOFI plunged after reporting better than expected results. Today the stock is +8% on very heavy volume because Wall Street isn’t always efficient. The conference call was great. Management is extremely bullish on their BNPL and credit card businesses and the stock is relatively inexpensive.
Today it was revealed that a MAJOR AI server company, $SMCI, might in fact be a fraud. The market is yawning at the resignation of E&Y and only taking down $SMCI by 30%, whilst jacking up $DELL and $HPE, who will likely take share because of this. But is everyone forgetting that $SMCI isn’t an island and that there is an entire ecosystem that goes with building servers and connecting them into the data centers?
$SMCI also is in the liquid cooling space, a field currently dominated by $VRT. Why isn’t the market bidding that up as well.
If $SMCI does $10b in annual sales, how much in sales will $NVDA lose if they go away, or is it a zero sum game, now that $DELL and $HPE will take all of their share?
My point is, the efficient market theory isn’t always exact. It’s more of a mere approximation of things as people attempt to gain information, peering into the future, trying to profit from what other people might not know.
If you enjoy the content at iBankCoin, please follow us on Twitter
