TLDR
- Super Micro Computer Inc. (SMCI) rose 3.45% in pre-market trading on Wednesday, following a day as the top S&P 500 gainer
- SMCI submitted delayed financial statements to the SEC, avoiding potential Nasdaq delisting, with BDO validating the statements
- Despite compliance, filing revealed internal control issues and increasing legal risks, including a Singaporean probe into possible export regulation breaches
- SMCI stock gained 8.5% on Tuesday after previous sell-offs related to new tariffs and concerns about export-restricted NVIDIA chips
- Taiwan Semiconductor Manufacturing’s $100 billion investment in five new Arizona chip plants helped boost AI stock sentiment
Super Micro Computer Inc. (SMCI) stock showed strong momentum this week, rising 3.45% in Wednesday pre-market trading. This increase followed Tuesday’s performance as the top gainer on the S&P 500, when the stock closed up 8.5%.
The recent rally comes after Super Micro submitted its delayed financial statements to the U.S. Securities and Exchange Commission last week. This crucial step helped the company avoid potential delisting from Nasdaq.
BDO, Super Micro’s auditor, validated the financial statements. They confirmed the documents aligned with U.S. accounting standards.
The company officially announced it had regained compliance with Nasdaq filing requirements. “This matter is now closed,” Super Micro stated in its release.
Charles Liang, CEO and founder of Super Micro, called the filing an “important milestone.” He mentioned the company would now focus solely on its core business operations.
Following the compliance achievement, some key executives sold shares. The company’s Co-founder and Senior Vice President, Sara Chiu-Chu Liu Liang, and Senior Vice President of Operations, George Kao, sold millions of dollars worth of company stock.
Super Micro’s business has been thriving largely due to increasing demand for NVIDIA’s GPUs. According to updated financials, the company’s sales more than doubled to $14.99 billion in fiscal 2024.
Despite regaining Nasdaq compliance, the filing revealed several internal control issues. It also highlighted a major customer shift and growing legal risks facing the company.
The stock encountered pressure on Monday after Singaporean lawmakers launched an investigation. They suspect fraudulent shipments of AI servers containing high-end Nvidia chips, possibly breaching U.S. export regulations.
Tuesday’s recovery of 8.5% came after a significant sell-off. Investors bought back into AI stocks after measuring risk factors around new tariffs and other bearish catalysts.
The stock had dropped due to new tariffs on Canada and Mexico
The stock had dropped earlier amid confirmation that new tariffs on Canada and Mexico would take effect. This news raised concerns about potential inflationary pressures making Federal Reserve interest rate cuts more difficult.
Super Micro also faced sell-offs following reports that China was accessing export-restricted Nvidia chips. These chips were allegedly being obtained through third-party server purchases, with Super Micro named as one of the server manufacturers.
Taiwan Semiconductor Manufacturing’s announcement provided a positive catalyst. The chip maker plans to invest $100 billion to build five new chip fabrication plants in Arizona.
This major investment helped ease fears about access to high-end chip manufacturing. Many investors see it as reducing geopolitical risk factors for companies like Super Micro.
Year-to-date, SMCI stock has surged more than 30%. Over the past month alone, it gained over 24%, according to Benzinga Pro data.
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