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Super Micro Computer (SMCI) has recently faced significant volatility and uncertainty due to accounting irregularities, including the departure of its auditor. While the stock price surged after the filing of its annual report, concerns remain about the company's governance and financial stability. Experts are divided; some see it as a potential buy due to its low price and growth opportunities in AI, while others advocate caution or suggest avoiding the stock altogether due to its high risk and past issues. There is substantial debate over whether the company has a solid future in the tech sector, especially amidst concerns of regulatory scrutiny and customer confidence. The stock may be viewed as an aggressive trade, attracting speculative investors but discouraging traditional value investors.
The main issue was uncertainty: the auditor situation, the Nasdaq listing, and so on. Some of this has been cleared up, and the company has vowed that it will meet the listing requirements by the deadline. The outlook this week was pretty solid. The worst is likely over here. When it cannot get worse, stocks typically go up, and we think that's occurring now, with long buyers and short sellers covering, pushing up the price. There are still risks about how long the data centre cycle will last, and the company will alway likely be 'tainted' after having two accounting scares in less than six years. But it is very cheap, and any positive developments will likely see an amplified up move. We would rate it a HOLD but is more buyable for the more aggressive types than it has been in some time. The listing is still a big risk, but this will be resolved one way or the other soon. We still do not have enough 'trust' in the company for a strong endorsement, and if we miss it we can live with that.
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SMCI has a new auditor, and Nasdaq has given it an extension to Feb 25 to file its financials. We would give 80% odds it hits this deadline (so, 2025). We would still consider it a risky stock, but investors are buying into the possibility that the worst is over. It 'probably' is but of course some other bugs could still crawl out here. The lawsuits will continue, but are very hard to prove. We would expect some minor settlements here. The company has ample short term cash, but cash flow needs to watched. It raised money several times last year and an issue now would be a bit surprising to us. It is a stock with lots of upside potential, but still plenty of possible downside risk as well. Some good news though would likely see an amplified positive move.
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Well positioned. Analysts are starting to look at it as more of a value play. Rare to say that something in the tech sector is value. Long-term hold. Will have more volatility than some of the larger names. If you decide to play, make sure it's not a big allocation. Instead, pick away at it, and wait and see.
Replacing the auditor or key executives will always sink a stock. Investors will want to wait and see what's going to happen next, and decide whether they can believe in this company's financials. Not a quick turnaround story, will take a while. And it could go badly instead.
SMCI has decided to replace the CFO and add more senior legal leadership. It says it will not need to restate any prior issued financials. This is also positive. But...the company did not specifically affirm guidance. Customers certainly may have backed off on purchase orders, so for the moment we would not rely on projections. The stock is very cheap and momentum and short covering will likely take it higher. But we will be more comfortable when we actually see a reported quarter which shows growth has not been negatively impacted by recent events.
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Auditor resigned, never a good sign, he'd never invest during accounting uncertainty. Stock dropped further. Merely a distributor. When something in the value chain doesn't actually add value, be wary of long-term prospects. Too risky.
Instead, invest in one of the majors making the chips such as NVDA, QCOM or AMD.
Super Micro Computer is a American stock, trading under the symbol SMCI-Q on the NASDAQ (SMCI). It is usually referred to as NASDAQ:SMCI or SMCI-Q
In the last year, 25 stock analysts published opinions about SMCI-Q. 6 analysts recommended to BUY the stock. 17 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Super Micro Computer.
Super Micro Computer was recommended as a Top Pick by on . Read the latest stock experts ratings for Super Micro Computer.
Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.
25 stock analysts on Stockchase covered Super Micro Computer In the last year. It is a trending stock that is worth watching.
On 2025-04-01, Super Micro Computer (SMCI-Q) stock closed at a price of $35.05.
They finally filed an annual report today. Some investors had feared they would be de-listed. Shares have climbed because they finally filed, not because they did something good.