TLDR:
- Super Micro Computer (SMCI) will provide Q2 fiscal 2025 business update on February 11, with stock up 33% in recent days ahead of the announcement
- Company faces critical February 25 deadline to submit audited financials to NASDAQ to avoid delisting after missing earlier 10-K SEC filing
- Stock has returned 900% since February 2015 but trades 70% below all-time highs amid regulatory issues including EY auditor resignation
- Company recently announced expanded production of AI data center solutions powered by Nvidia’s Blackwell platform
- Analysts project revenue growth from $14.9B in FY2024 to $24.49B in FY2025, with mixed Wall Street sentiment (2 Buy, 3 Hold, 1 Sell ratings)
Super Micro Computer (NASDAQ:SMCI) shares have risen 33% in recent days as investors await a crucial second quarter fiscal 2025 business update scheduled for February 11 after market close. The server and computing solutions manufacturer faces a pressing February 25 deadline to submit audited financials to NASDAQ or risk delisting from the exchange.
The company’s stock performance has been volatile, delivering approximately 900% returns to shareholders since February 2015. However, SMCI currently trades 70% below its all-time highs amid ongoing regulatory challenges.
These challenges stem from Super Micro’s failure to file its annual report for fiscal 2024, which ended in June. The situation was further complicated by the resignation of its auditor, EY, who stated they were “unwilling to be associated with the financial statements prepared by management.”
Founded in 1993, Super Micro specializes in designing and manufacturing high-performance computing solutions, including servers, storage systems, and related hardware components. The company serves enterprise data centers, cloud computing, artificial intelligence, and edge computing markets.
Recent developments show Super Micro expanding its presence in the AI sector. The company announced increased production of AI data center solutions powered by Nvidia’s new Blackwell platform, with CEO Charles Liang highlighting the collaboration’s focus on delivering high-performance computing solutions for AI applications.
The company’s revenue growth has been notable, increasing from $2 billion in 2015 to $14.9 billion in 2024. However, profit margins have narrowed, with gross margins declining from 18% to 14.1% over the past twelve months.
Continued Growth?
Analysts project continued growth, forecasting revenue to reach $24.49 billion in fiscal 2025. Adjusted earnings are expected to increase from $2.01 per share in 2024 to $2.17 per share in 2025.
The stock currently trades at 13 times forward earnings, attracting mixed opinions from Wall Street analysts. Current recommendations include 2 Strong Buy, 1 Moderate Buy, 8 Hold, and 2 Strong Sell ratings.
One investor, known by the pseudonym Oakoff Investment, expresses optimism about SMCI’s position in the data center solutions market, which is projected to grow at an 11.8% compound annual growth rate between 2023 and 2028.
Oakoff points to SMCI’s research and development investments and partnerships with GPU manufacturers like Nvidia as competitive advantages. The investor also notes the company’s efforts to improve manufacturing processes through a new production facility in Malaysia.
The upcoming business update may address several key areas, including revenue and earnings guidance for fiscal 2025, AI-powered data center solutions, and potential impacts from semiconductor market supply chain disruptions.
Wall Street’s average price target stands at $29.75, suggesting a 30% downside from current levels, though individual analyst targets vary widely.
The company’s immediate focus remains on meeting the February 25 NASDAQ deadline for submitting audited financial statements, a crucial milestone for maintaining its stock exchange listing.
Recent trading activity shows increased investor confidence, with the stock up 26% in 2025 despite ongoing regulatory concerns.
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