TLDR:
- Super Micro Computer’s stock has doubled year-to-date despite previous accounting concerns, with shares reaching an all-time high of $119 in early 2024
- The company expects fiscal second-quarter sales growth of 54% year-over-year, reaching between $5.6-5.7 billion
- SMCI stock rose 17% week-over-week to $56.07 as investors anticipate the February 25 deadline for delayed financial filings
- Management believes it will meet the February 25 deadline for filing delayed reports, with no restatements needed for prior filings
- The company has entered full production of servers using Nvidia’s new Blackwell GPUs, positioning it for potential growth in the AI hardware market
Super Micro Computer (SMCI) is experiencing a strong market recovery in early 2025, with its stock price doubling year-to-date as the company approaches a crucial deadline for delayed financial filings and reports robust sales growth in its server business.
The Silicon Valley-based server manufacturer, founded in 1993, has seen its shares climb to $56.07, marking a 17% increase week-over-week. This rise comes as investors await the company’s filing of delayed financial reports, due by February 25, 2025.
The company’s recent troubles began in mid-2024 when short-seller Hindenburg Research released a report questioning its accounting practices. This led to the resignation of Ernst & Young as the company’s auditor and delays in filing annual reports.
These events echoed previous challenges faced by Super Micro Computer. In 2020, the company paid a $17.5 million fine to the Securities and Exchange Commission for accounting violations. In 2018, its shares were temporarily delisted from the Nasdaq due to delayed financial reporting.
However, recent statements from management have helped ease investor concerns. The company has stated it believes it will meet the February 25 deadline for filing its delayed reports, including the Annual Report on Form 10-K for fiscal year 2024 and the Quarterly Report on Form 10-Q for the period ended September 30, 2024.
Preliminary financial results show strong operational performance. The company projects fiscal second-quarter sales between $5.6 billion and $5.7 billion, representing a 54% increase from the previous year.
Super Micro Computer specializes in creating energy-efficient server designs that help clients reduce costs while running and training AI algorithms. The company converts GPUs from manufacturers like Nvidia and Advanced Micro Devices into ready-to-use computer servers.
Super Micro Computer Begins Production of Blackwell GPU Servers
In a recent development, the company has begun full production of servers using Nvidia’s new Blackwell GPUs. This positions Super Micro Computer to potentially benefit from growing demand in the data center and AI server markets.
The stock’s current valuation reflects both its growth potential and ongoing uncertainties. With a forward price-to-earnings ratio of 23, the stock trades below the Nasdaq average of 28, despite its strong sales growth.
The broader market context adds another layer to Super Micro Computer’s story. On Friday, major indices declined, with the Dow Jones falling 1.69%, the S&P dropping 1.71%, and the Nasdaq declining 2.20%.
Super Micro Computer’s stock hit an all-time high of $119 in early 2024, following increased interest in AI-related companies after the release of ChatGPT in 2022. This marked a notable change from the stock’s relatively flat performance between 2015 and 2021.
The company’s current stock price of $56.07 reflects both recent market volatility and investor response to its ongoing financial filing situation. Trading volume remains high as the market awaits the February 25 filing deadline.
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