MicroAlgo(MLGO) Plunges 21.81% Amid Bearish Trend, Earnings Disappointment

MicroAlgo(MLGO) experienced a significant decline, dropping 21.81% over the past two days, with a cumulative loss of 25.21%. The share price plummeted to its lowest level since December 2024, marking an intraday decrease of 22.73%.

The strategy of buying MLGO shares after they reached a recent low and holding for 1 week showed poor performance over the past 5 years. The annualized return was -3.5%, significantly underperforming the market. This indicates that this strategy failed to capitalize on broader market movements, suggesting a need for either adjusting the strategy or considering other investment approaches.

Technical analysis indicates that MicroAlgo's stock is currently in a bearish trend, with the Relative Strength Index (RSI) at 15, signaling heavy oversold conditions. This suggests a potential near-term rebound. The stock is trading below its 50-day and 200-day moving averages, confirming a sustained downtrend.

Fundamentally, MicroAlgo's Earnings Per Share (EPS) stands at $0.56, with a low Price-to-Earnings (P/E) ratio of 1.68. This reflects market concerns over significant risks or future earnings deterioration. The company's small market capitalization of approximately $64.93 million implies higher volatility and risk.

Recent developments include the integration of quantum encryption technology, announced on June 9, 2025. This strategic pivot towards advanced tech innovation could drive long-term growth if effectively commercialized. However, investors appear disappointed with recent earnings, contributing to the stock's decline.

Overall, MicroAlgo Inc. faces bearish technical and fundamental pressures. While there is potential for a short-term rebound due to oversold conditions, the quantum encryption initiative could serve as a long-term catalyst. Nevertheless, current structural weaknesses and market skepticism pose significant challenges for the company.