Super Micro Computer (SMCI-Q)

Take profits; it's had a parabolic move. Watch NVDA earnings next week.

Potential big beneficiary of AI. Doesn't love that it had issues filing its financials late. Also doesn't love buying after such a move up like today. As a value investor, he looks more to second-derivative AI plays such as power demand.

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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Down 75% from its high, not an opportunity, because accounting irregularities always mean sell.

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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The news is that Evercore to raise capital for SMCI, which is both good and bad news. But he has a strict rule: accounting irregularities = sell, even if business is good. 

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.

Volatility on steroids, a favourite of the speculative trading crowd. Auditors resigned, and that's all an investor needs to know. Red, red, red flag. For traders, not investors like himself.

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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It was set up really well with explosive growth and accelerating revenue and earnings. But the auditor quit and they haven't solved the numbers. At 5 i they feel that if the auditor quits then it is time to get out.

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.

Their board did a review and found nothing wrong. Well, their accountants resigned for a reason, didn't they? Besides, it's the regulator's job to do a review. Shares keep sinking.

Is down over 30% today because their auditor quit, but still 41% in the past year. Don't touch this. Their delay on filing their 10K calls into questions the validity of the financials, showing a lack of corporate governance. Don't catch this falling knife.

Doesn't mind nibbling here if we do have some upside until the end of the year. Just as long as you have the discipline to limit your risk near recent lows. If it moves below those lows, take off the position. A trade, since we're late cycle and we're rotating away from info tech. This could be a source of funds for investors, and so head lower.