Why Super Micro Computer Stock Soared Today

Super Micro Computer (NASDAQ: SMCI) stock ended Tuesday's trading with big gains. The company's share price closed out the session up 8.5%. It had been up as much as 12.6% earlier in the day.

After a big sell-off yesterday, Supermicro stock regained some ground as investors bought back into some artificial intelligence (AI) stocks after measuring risk factors surrounding new tariffs and other bearish catalysts. The company's share price also got a boost from news that Taiwan Semiconductor Manufacturing will spend $100 billion to build five new chip fabrication plants in Arizona.

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Supermicro stock sees recovery after bearish action yesterday

Supermicro and other AI stocks got rocked with valuation pullbacks yesterday after President Donald Trump confirmed that new tariffs on Canada and Mexico would go into effect today. The news increased concerns that tariffs would create new inflationary pressures and make it harder for the Federal Reserve to cut interest rates.

Supermicro also saw sell-offs in conjunction with another series of reports China was gaining access to export-restricted Nvidia chips by purchasing servers containing the tech through third parties. Supermicro was named as one of the server makers whose products may have included the banned chips. But investors bought back into the stock on the heels of yesterday's pullback as TSMC's big investment in U.S. fabrication plants helped increase bullish sentiment surrounding some AI stocks.

TSMC's $100 billion investment has implications for Supermicro

TSMC is responsible for fabricating Nvidia's chip designs and dominates the market when it comes to producing AI chips and other high-performance semiconductors. News that the company plans to dramatically expand operations in the U.S. is causing a moderate easing of fears that access to high-end chip manufacturing services could be disrupted by geopolitical risk factors. On the other hand, building new chip foundries is a lengthy process, and geopolitical dynamics remain a key risk factor for Supermicro stock.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.