Super Micro Computer Inc. (NASDAQ:SMCI) just can't catch a break. The AI server maker saw its stock nosedive over 10% in premarket trading on Monday, slipping below the critical $30 support level.

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What's spooking investors? A fresh AI threat from China's DeepSeek, which has Wall Street questioning the sustainability of SMCI's dominance.

DeepSeek Disrupts The AI Game

Chinese AI startup DeepSeek, backed by hedge fund mogul Liang Wenfeng, sent shockwaves through Silicon Valley with its new AI model, DeepSeek R1.

DeepSeek claims it trained its model with far fewer Nvidia Corp (NASDAQ:NVDA) chips than U.S. rivals like OpenAI and Meta Platforms Inc (NASDAQ:META). If true, this could upend the AI hardware market—and Super Micro is in the direct line of fire.

A Brutal 2024 & Nasdaq Deadline Looms

Super Micro's stock has been in freefall since mid-2024, and the latest AI shake-up is just adding to the pain.

Accounting delays, a Nasdaq 100 ejection, and a rapidly evolving AI landscape have kept the stock from regaining its highs.

With a looming Feb. 25 deadline to meet Nasdaq's listing standards, SMCI needs a lifeline—fast.

SMCI Stock’s Technical Signals: Strongly Bearish

The broader bearish sentiment, is validated by technical indicators flashing bearish signs as well.

SMCI stock's eight-day, 20-day, and 50-day simple moving averages (SMAs), all suggest bearish sentiment, while the 200-day SMA and the negative Moving Average Convergence/Divergence (MACD) hint at further downside.

The Relative Strength Index (RSI) sits at 41.29—hovering near neutral territory.

What's Next?

Super Micro faces the challenge of demonstrating steady AI server demand amid DeepSeek's advancements. As U.S. tech giants respond to China's AI progress, investors are watching SMCI's next steps closely.

Can the stock shake off its losing streak, or is there more pain ahead?

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