MicroAlgo's Stock Plummets 21.81%, Highlighting Bearish Trend Amid Quantum Tech Innovations

Technical Analysis

MicroAlgo Inc. (MLGO) closed at $0.86 on June 13, 2025, after plummeting 21.81% intraday. The stock is currently trading near its 52-week low of $0.85, sharply below its 50-day ($5.82) and 200-day ($4.91) moving averages, indicating sustained bearish momentum. The RSI at 16 signals oversold conditions but also suggests potential exhaustion of selling pressure in the very short term. The MACD value of -0.66 confirms a bearish trend. Volume on the last trading day (60.20 million) significantly surpassed the 32.56 million average, reflecting heavy sell pressure and likely panic trading. The absence of defined support and resistance levels complicates technical anchors but confirms high volatility. The 1-day outlook points to potential continued volatility, with possible minor rebound attempts given the extreme oversold status, though overall trend remains sharply negative. Weekly performance is expected to remain weak absent significant catalysts, as the broader downtrend has not reversed.

Fundamental Analysis

MLGO is valued at approximately $20.81 million market cap, with 24.20 million shares outstanding. The very low share price contrasts with a trailing twelve months (TTM) EPS of $0.56, resulting in an ultra-low price-to-earnings (P/E) ratio of 1.54. Such a depressed valuation typically indicates either market skepticism about earnings quality or risk factors outweighing fundamental profitability. The recent integration of Quantum Image LSQb Algorithm with Quantum Encryption for enhanced information security, disclosed June 9, is a positive fundamental catalyst reflecting ongoing innovation and potential future revenue streams in quantum technology—a promising sector. However, the disconnect between positive technological development and severe price collapse may be due to broader market factors, liquidity issues, or past performance concerns.

Regarding intrinsic value, the low P/E ratio and positive EPS imply that the stock trades significantly below earnings-based valuation, suggesting undervaluation on a purely earnings basis. Yet, the extremely low share price and trading near year lows reflect market doubts on sustainability or risks not captured by EPS alone (e.g., balance sheet strength, cash flow, or fundamental outlook). Long-term investment potential hinges on MicroAlgo’s ability to monetize its quantum encryption technology and scale revenue—a process likely requiring time and capital support. Given the emerging quantum tech market and MicroAlgo’s recent innovation, the company could possess long-term growth potential, but this is premised on execution risk and capital market conditions.

Short- to Medium-Term Performance Predictions

For June 16, 2025, the stock may exhibit high volatility with potential intraday rebounds driven by technical oversold status but likely impacted by residual panic selling or stop-loss triggers. The weekly trend is expected to remain under pressure amid a lack of clear support and elevated volatility. Absent new fundamental catalysts or market stabilization, the downward trend or consolidation near current lows is probable.

Overall Evaluation

MicroAlgo displays a compelling cost basis relative to earnings and technological innovation in an emergent sector, but faces significant near-term headwinds evidenced by rapid price erosion, volume surges on the sell side, and lack of technical support. The stock qualifies as a Hold candidate due to its undervaluation on earnings and potential arising from recent quantum technology advances, balanced against significant price and momentum risks. Investors may consider monitoring for signs of stabilization or clearer fundamental progress before establishing more aggressive positions.