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Charles Liang, CEO of Super Micro Computer Inc., made a notable appearance at the Computex conference held in Taipei, Taiwan, on June 5, 2024.
Super Micro Computer’s journey has been marked by significant volatility.
In a dramatic turn of events during 2024, the company’s stock reached unprecedented highs as it joined the S&P 500 in March. However, it subsequently faced a staggering decline of 85% over the following eight months. Now, the stock is experiencing a resurgence.
As the company prepares to release its quarterly earnings report, Super Micro shares have surged by 59% over the last five trading days, including an 18% leap on Monday alone. Since the beginning of 2025, its stock is up 40%, contrasting sharply with a modest 2.1% increase in the Nasdaq.
The optimism surrounding Super Micro is primarily tied to its pivotal role in the rapidly expanding artificial intelligence sector, where it competes with notable players like Dell and Hewlett Packard Enterprise by providing servers equipped with Nvidia’s graphics processing units.
Super Micro has seen its revenue more than double over three consecutive quarters, driven by escalating demand for AI infrastructure. Major corporations, including Meta, Amazon, Alphabet, and Microsoft, are expected to invest approximately $320 billion collectively in AI advancements and data center expansions in 2025, according to statements from industry leaders.
Analysts anticipate that Super Micro will report a 60% revenue increase for the December quarter, forecasting a total of around $5.89 billion, based on a consensus from LSEG.
Conversely, skepticism looms among some analysts regarding the reliability of these figures. The company has yet to release its audited financial statements for the most recent fiscal year and quarter. In August 2024, Hindenburg Research disclosed a short position against Super Micro, alleging potential accounting irregularities. This revelation coincided with the company’s postponement of its annual report release.
The stock subsequently plummeted by 38% in August, with negative momentum continuing into September, when the Department of Justice reportedly initiated an investigation into the company. Later, in October, Ernst & Young resigned as Super Micro’s auditor, citing serious concerns about the company’s governance and financial oversight.
In a letter explaining their resignation, Ernst & Young expressed, “We are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management’s and the Audit Committee’s representations.”
Pressure to Perform
In November, Super Micro released unaudited financial results that disappointed investors and raised concerns about the potential for delisting from the Nasdaq. However, the company received a boost later that month after appointing BDO as its new auditor. By December, an independent special committee reported finding “no evidence of misconduct,” and Super Micro gained an extension until February 25 to file its financial report.
Despite these developments, the stock had already suffered significantly, leading to its exclusion from the Nasdaq 100 in December, merely five months after its inclusion.
The upcoming earnings report represents a crucial moment for Super Micro, providing a chance to demonstrate to investors that its business fundamentals remain robust and that previous compliance issues are now in the past.
Nonetheless, analysts maintain a cautious outlook.
According to FactSet data, the average price target suggests an approximately 18% decline in the stock’s value. Currently, only ten analysts provide coverage for Super Micro, a sharp decrease from more than half previously since September. Of the analysts still covering the stock, seven recommend holding or selling. In contrast, last year, three-quarters encouraged buying the stock.
Matt Bryson, an analyst at Wedbush Securities who advises holding onto shares, highlighted the “substantial uncertainties” associated with the upcoming earnings report. He pointed to ongoing questions regarding the delayed financial filings and the company’s ability to fulfill sales expectations.
“Given our lack of certainty around SCMI’s listing status as well as near-term results, and with our more optimistic view around longer-term sales opportunities offset by our concerns around increased competition, we believe it is appropriate we retain our neutral rating,” Bryson stated.
WATCH: Super Micro appoints BDO as independent auditor
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