Super Micro Computer's Stock Surges Amid AI Boom and Financial Reporting Challenges

Super Micro Computer stock surges 12% as strong earnings raise hopes it won't be delisted

Shares of the AI hardware company surged 12% on Tuesday, trading at $53 a piece. The sustained momentum comes as Super Micro's latest earnings report reassured investors about its delayed annual filing and outlined an ambitious growth target for 2026. Super Micro is working to avoid delisting by Nasdaq, with a deadline of February 25 to submit its delayed annual report to the Securities and Exchange Commission (SEC). CEO Charles Liang seemed confident that it would be submitted on time. Since last week, investors have been bullish about SMCI's performance. In its earnings report, the company expects to reach $40 billion in revenue by fiscal 2026, while analysts anticipated $30 billion for that period. Last week, banking giant JPMorgan (JPM+0.90%) analysts raised the SMCI stock price target to $35 from $23 while keeping an 'underweight' rating. SMCI stock has risen 80% year-to-date. Super Micro makes hardware that supports AI applications. Last year, the San-Jose-based company went through many ups and downs. The SMCI stock thrived for much of 2024 and entered the Fortune 500 at No. 498 as part of a frenzy over AI and related tools. As a key partner and reseller of Nvidia's (NVDA+0.63%) GPUs and other components, Super Micro integrates the technology into its servers to support AI workloads. Super Micro CEO Charles Liang and Nvidia CEO Jensen Huang are both Taiwanese immigrants and have a long-standing relationship. Super Micro Computer went through a rough phase in September 2024 when a short seller, Hindenburg Research, published a scathing report accusing the company of accounting red flags and questionable business dealings, including alleged sanctions evasion from exports to Russian and Chinese firms. Following that, its auditor, Ernst & Young, resigned, citing disagreement over Super Micro Computer's governance practices and board independence.

SMCI Stock Climbs Nearly 5% in Tuesday Pre-Market. What's Going On? - NVIDIA (NASDAQ:NVDA), Super Micro Computer (NASDAQ:SMCI)

The shares of Super Micro Computer Inc. SMCI rose 4.8% during the pre-market trading session on Tuesday amid positive sentiment ahead of its annual report filing deadline on Feb 25. The shares are also rising following its upbeat FY2026 revenue projection last week. What Happened: Super Micro Computer's stock rise is largely due to the company's FY2026 revenue projection of $40 billion, a 70% increase from FY2025, which surpassed analysts' expectations. This bullish outlook comes despite the company missing its second-quarter results and providing a less-than-stellar FY2025 guidance. The company is currently under legal scrutiny following allegations of accounting manipulation and sanctions evasion. However, the company's CEO, Charles Liang, expressed confidence that they will meet the February 25 deadline for filing the delayed annual report. SEE ALSO: After Discounts, Tesla Is Now Offering Free Vinyl Wraps To Boost Foundation Series Cybertruck Sales Why It Matters: Super Micro Computer's stock has risen over 1,336% in the last five years, backed by demand for AI hardware and infrastructure in line with the AI boom. The launch of ChatGPT in 2022 posed a positive catalyst for the server market, as demand for AI servers increased with the generative AI boom. Super Micro Computer was accused of accounting manipulation, sibling self-dealing, and sanctions evasion by Hindenburg Research. However, an independent Special Committee did not find any evidence of fraud or misconduct on the part of management or the company's board. CEO Charles Liang expressed confidence in the future operations of SMCI: "With our leading direct-liquid cooling (DLC) technology and over 30% of new data centers expected to adopt it in the next 12 months, Supermicro is well positioned to grow AI infrastructure design wins based on NVIDIA NVDA Blackwell and more." Last week, Wedbush increased the firm's price target on Super Micro from $24 to $40. READ MORE: Apple and Meta in Race To Develop AI-Powered Humanoid Robots NVDANVIDIA Corp$139.970.81%Overview Rating:Good75%Technicals Analysis1000100Financials Analysis600100WatchlistOverviewSMCISuper Micro Computer Inc$50.174.72%Market News and Data brought to you by Benzinga APIs

Super Micro Rides AI Server Boom, Analysts See Big 2026 Growth Despite Near-Term Challenges - Super Micro Computer (NASDAQ:SMCI)

Artificial intelligence server company Super Micro Computer, Inc.'s SMCI stock has risen over 1,336% in the last five years, backed by demand for AI hardware and infrastructure in line with the AI boom. Aswath Damodaran, a Professor of Finance at the Stern School of Business at New York University, proclaimed the need for investments in infrastructure to accomplish AI ambitions. The launch of ChatGPT in 2022 posed a positive catalyst for the server market, as demand for AI servers increased with the generative AI boom. Also Read: Apple May Face Limited Tariff Impact, Trump Administration Could Ease DOJ Pressure: BofA Dell, Super Micro, and Hewlett Packard are the Big 3 Original Equipment Manufacturers of the AI server market. However, "Original Design Manufacturer direct" sales dominate as Microsoft Corp MSFT and its Big Tech peers continue to have their servers custom-made, as per Counterpoint. Super Micro's gross margin ranged between 15%-18% in the last three fiscals compared to Hewlett Packard's 33.4%-35% and Dell's 22%-24% due to the companies' diversified product portfolio with potentially higher margin segments. Also, Super Micro priced its AI servers at a discount versus rivals to win market share, Reuters cited CFO David Weigand during a quarterly earnings call. Super Micro's stock value lost 25% in the last six months as auditor Ernst & Young quit in October over governance concerns. The company tapped BDO USA as its new auditor. Super Micro, scrutinized by a Hindenburg Research report and a U.S. Department of Justice probe for alleged accounting fraud, has until February 25 to file its delayed financial reports. The stock lost its position in the Nasdaq 100 index in December 2024, months after joining it in July 2024. According to the AI server company's latest quarterly report, Super Micro's customers include Intel Corp INTC, Nvidia Corp NVDA, Advanced Micro Devices, Inc AMD, Samsung Electronics SSNLF, and Micron Technology, Inc MU. Super Micro remains engaged in constructive endeavors, including collaborating with Taiwan's Guo Rui to form a renewable-energy-powered computation center in Taiwan. Reportedly, Nvidia plans to build a secondary headquarters in Taiwan. Super Micro launched new AI data center solutions with Nvidia Blackwell, and it has production plants in San Jose, Europe, and Asia. In January, Super Micro began shipping max-performance servers with Intel Xeon 6900 processors optimized for AI, HPC, and GPU-intensive tasks. On January 30, Super Micro CEO Charles Liang tweeted about expanding its partnership with Elon Musk's AI startup, xAI. On Tuesday, Super Micro reported preliminary second-quarter revenue of $5.6 billion -- $5.7 billion (below the $5.89 billion consensus), up 54%. The company cut its fiscal year 2025 guidance to $23.5 billion -- $25 billion from its previous forecast of $26 billion -- $30 billion (versus the $24.92 billion consensus). It projected fiscal year 2026 revenue of $40 billion versus the $29.92 billion consensus. The company expects to file its delayed annual and quarterly reports to the U.S. SEC by the deadline. Analysts rerated the stock upon the results. Wedbush analyst Matt Bryson maintained Super Micro with a Neutral and raised the price target from $24 to $40. JP Morgan analyst Samik Chatterjee maintained Super Micro with an Underweight and raised the price target from $23 to $35. Needham analyst Quinn Bolton suspended the rating on Super Micro. Wedbush: Super Micro's softer, uninspiring results, the vision of a significantly more robust future, and plans to file its financials before the deadline should reduce uncertainty. Bryson expects the business to expand considerably in the first half of 2026. However, he is also hesitant to model as aggressively as management forecasts. JP Morgan: Despite the near-term softness, Super Micro surprised with an updated full-year guide, which implied a strong revenue inflection that the company expects will start a robust AI server revenue cycle. The price target boost reflects increased conviction from the management team to meet regulatory deadlines. Needham: Super Micro's preliminary revenue and gross margin results fell slightly short of expectations as customers waited to order new Blackwell systems and aggressive pricing on Hopper products. Bolton maintained his suspended rating as he awaited the filing of the annual and quarterly reports. Investors can gain exposure to Super Micro through Vanguard Total Stock Market ETF VTI and Vanguard S&P 500 ETF VOO. Price Action: SMCI stock closed at $39.68 on Wednesday. Also Read: Meta Bets Big on Future of Smart Glasses and AI, Outspends Apple and Amazon on AR/VR Image via Shutterstock SMCISuper Micro Computer Inc$39.422.10%Overview Rating:Speculative50%Technicals Analysis660100Financials Analysis400100WatchlistOverviewAMDAdvanced Micro Devices Inc$111.730.57%DELLDell Technologies Inc$112.741.17%HPEHewlett Packard Enterprise Co$21.200.09%INTCIntel Corp$22.497.25%MSFTMicrosoft Corp$409.14-0.56%MUMicron Technology Inc$91.65-2.58%NVDANVIDIA Corp$131.00-1.36%SSNLFSamsung Electronics Co Ltd$42.48-13.8%VOOVanguard S&P 500 ETF$555.49-0.21%VTIVanguard Total Stock Market ETF$298.89-0.29%Market News and Data brought to you by Benzinga APIs

Is Super Micro Computer Stock Finally Out of the Woods? | The Motley Fool

Early last year, Super Micro Computer (SMCI 2.77%) was one of the biggest artificial intelligence (AI) winners. The stock soared 188% in the first half as customers rushed to the equipment maker for servers, workstations, and other elements crucial to AI data centers. Earnings were on the rise, with quarterly revenue reaching levels the company used to deliver in a full year. However, questions about Supermicro's accounting practices interrupted the momentum. This started with a Hindenburg Research short report alleging accounting red flags -- and then Supermicro itself delayed the reporting of both its 10-K annual report and a 10-Q quarterly report. These are audited financial reports that publicly traded companies must file with the Securities and Exchange Commission. The delay put the company at risk for a Nasdaq delisting. To make matters worse, Supermicro's auditor resigned, representing another roadblock along the path to filing audited financial reports. All this has weighed on the stock, resulting in a decline of 30% from the release of the short report in August of last year to the close of trading on Feb. 11. Supermicro has taken steps to put everything back on track, though, and this week, as it reported its latest unaudited financial figures, even said the growth trajectory for this fiscal year "remains promising." Is Supermicro stock finally out of the woods? Let's find out. First, let's consider some background information, including Supermicro's successes and challenges over the past year or so. The company is more than 30 years old, but revenue truly took off in recent times along with the AI boom. Customers needed full-rack scale solutions for their data centers, and Supermicro is an expert at speedily delivering customized equipment. Supermicro can do this thanks to its building blocks technology -- its equipment has many common parts, making it easy to quickly assemble items tailored to the needs of specific customers. On top of this, Supermicro works hand in hand with the world's biggest chip designers, allowing it to immediately include their innovations in its equipment. All this helped Supermicro to reach its first $3 billion quarter early last year -- a level that represented full-year revenue as recently as in 2021. But as mentioned, Supermicro hit a stumbling block as questions about its financial reporting arose. Since though, the company has taken steps to address the issues. It hired a new auditor that set to work on the financial filings -- and Supermicro confirmed these reports would be filed by the Feb. 25 deadline Nasdaq set to maintain the company's listing. An independent committee also completed a review of Supermicro and found no signs of wrongdoing or fraud -- findings mainly called for the appointment of additional executives to strengthen the management team as the company grows. Finally, Supermicro confirmed that it doesn't expect a restatement of financials when it files the 10-K and quarterly figures on Feb. 25. And, in a preliminary second-quarter 2025 earnings report this week, Supermicro gave us a glimpse into the latest trends. The financial reporting delays, along with research and development investments, have weighed on margins in recent times -- for the quarter, gross margin on a non-GAAP basis (generally accepted accounting principles) was 11.9%. And for the fiscal year, Supermicro has lowered its revenue guidance to the range of $23.5 billion to $25 billion from the earlier forecast of $26 billion to $30 billion. But the company remains confident about the possibility of reaching $40 billion for fiscal year 2026. In coming quarters, Supermicro's delivery of products equipped with Nvidia's new Blackwell chips and Supermicro's strengths in direct liquid cooling technology should help drive growth. Now, let's get back to our question: Is Supermicro finally out of the woods? I would say "almost." One key date is just around the corner, and cautious investors should wait until that point before deciding on whether to buy Supermicro stock. I'm talking about Feb. 25, the deadline for the filing of the company's audited reports. Though Supermicro doesn't expect restatements, it's important to see whether the company will follow through on its pledge to file by that deadline -- and it's important to take a look at the contents of the reports. If all looks good at that point, it may then be fair to say that this beaten-down stock is out of the woods.