A rough week just pushed Oracle, Palantir, and Super Micro Computer into the deepest oversold levels seen in months, after a sell-off hit U.S. tech and AI names so hard that several major indexes logged their worst day in more than four weeks.
The drop happened on Thursday across the United States as traders dumped the biggest technology names over fresh fears about stretched AI valuations, according to CNBC.
Even though the Nasdaq Composite tried to claw back losses on Friday, the index is still down 3.5% for November, and the fall exposed a group of battered stock names now flashing oversold signals on the 14-day RSI screen.
That screen, run on the S&P 500, highlighted companies under sharp pressure this week, ranging from cloud databases to frozen fries. Any stock with an RSI below 30 lands in oversold territory, and some of these names fell far below that line.
The biggest example is Oracle, which also sells cloud infrastructure. Oracle’s RSI fell to a little over 24, one of the lowest readings on the entire index. The company’s shares dropped nearly 6% this week, leaving the name down 35% since its September 10 peak, even though it’s still up 35% for the year.
The problem weighing on Oracle is the rising worry on Wall Street that Oracle is relying too much on debt to expand its AI infrastructure plan.
That pressure grew strong enough that Bank of America returned to cover Oracle’s credit on Wednesday and held it at market weight while pushing for a clearer financial approach in such a heavy spending cycle.
Analyst Tom Curcuruto said investors have priced in “a reasonable discount for a lengthy list of concerns that are likely to remain overhangs in the medium term,” pointing to AI rivals, big capital needs, and weak free cash flow as the main issues.
Super Micro Computer loses momentum as earnings miss hits confidence
Super Micro (SMCI) also landed on the oversold list this week with an RSI under 27 after the company’s shares lost 30% in November and dropped 45% from the peak it hit in February.
The latest selling wave came after the firm reported a first quarter that missed expectations on both revenue and earnings, and also showed a slimmer gross profit margin.
Analysts tracking SMCI through LSEG hold mixed views, with two calling it a strong buy, seven calling it a buy, and eight rating it a hold.
Even so, their consensus target still points to roughly 23% upside, showing that some on Wall Street still expect improvement despite the recent damage.
A one-year chart of the stock shows steep swings as traders reacted to changing growth hopes throughout the year.
Palantir battles valuation fears, Burry’s attack, and a wild chart reversal
Palantir became another focus after Jim Cramer reacted to comments from Carl Quintanilla about the company’s recent share move. Cramer said he wasn’t worried and described Palantir as a major player in defense and aerospace.
“I can’t back away from Palantir,” Cramer said while pointing at the profit run and rapid adoption under CEO Alex Karp. Cramer said every chief executive he checked with told him Palantir changed their company “radically,” and he also argued the firm could overhaul U.S. defense systems.
The stock took a hit right after earnings when it fell under $170, a move tied to a short call from Michael Burry, who clashed with Alex during that period. The name then ran back to $190 in heavy trading.
The weekly chart shows a drop into an uptrend line from mid-2024 alongside the 20-week moving average, while the daily chart shows a round-trip move after the fight between Alex and Burry.
The stock broke below the 20-day, 50-day, and even the weekly trend before jumping back over $190 on volume over the 50-day average. At Inside Edge, the team is holding an 8.5% stake in the fast money book and a 2% stake in the flagship growth model.
They plan to add more if the name breaks into the $200 range. Traders will now wait to see if Burry repeats his real-estate short success or fails with this bearish call on the AI boom.
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Source: https://www.cryptopolitan.com/orcl-pltr-smci-most-oversold-stocks-us/
