Super Micro sinks as Wall Street hates its trade-off of profitability for sales

Exxon and Chevron jumped again on Friday, the two largest positive contributors to the S&P 500 as of midday, even as the broader market remained mired in the red.

The two giant US energy companies are also on track to notch another in a series of new all-time highs as well Friday, and for obvious reasons.

Energy continues to be the bright spot for the S&P 500 since the start of the Iran war. (It is the only gainer of the 11 separate sectors that compose the blue-chip index, rising more than 7% in March.)

But energy’s gain has come with pain elsewhere. Since rising gas prices work mechanically as a tax on other forms of consumer spending, staples stocks have been hit hard, with the sector down more than 6% this month alone. Meanwhile, the inflationary pressure pushing the Fed away from further rate cuts continues to hit precious metals and miners. SPDR Gold Shares ETF and iShares Silver Trust futures both fell further on Friday; they’re down roughly 10% and 15% for the week, respectively, and producers like Newmont and Freeport-McMoRan also continue to drop.

Since the Iran war started, risky assets have been in the crosshairs. Stocks have sold off as oil prices spiked, the odds of rate cuts later this year have been slashed, and even the usual safe havens like gold and silver have been unreliable ports in the growing storm.

One port of refuge, however, has been in software stocks. As noted by my colleague Matt Phillips recently, a number of high-profile software names — the same ones that some pundits doomed to obsolescence because of AI just a few short weeks ago — have held up well. Design company Figma, however, has not been one of those names.

Figma’s stock has dropped 19% since the close of trading on February 27, while the iShares Expanded Tech Software ETF has gained 2%.

Though still notching very respectable top-line growth, with sales up 40% last year, Figma is far from the “cash cow” stage of its life — perhaps why it’s been hit harder than peers such as Adobe, Workday, or Salesforce. Indeed, on a GAAP basis, Wall Street still expects the company to lose $477 million this year, as heavy stock-based compensation weighs on its profitability.

Figma’s pain was then compounded when Google announced a major update to Stitch on Wednesday — a product described as “an AI-native software design canvas that allows anyone to create, iterate and collaborate on high-fidelity UI from natural language.”

Debate is still raging on Reddit and other social media platforms as to whether Stitch, or other vibe-coding platforms and tools, will meaningfully eat into Figma’s core business. One user said that it “offers very little to experienced designers. It removes the tools Figma offers and delegates everything to AI. Figma at least has all the capabilities plus AI for people who want to use AI.” Another — complaining about the newly prohibitive cost of credits in Figma’s own AI-powered tool, Figma Make — was more bearish on Figma’s usefulness, saying that the number of credits the designer would need to use would cost $16,000 under Figma’s new pricing model.

For now, investors aren’t giving Figma the benefit of the doubt, with the stock down 12% in the last two days alone.