With shares down 71% from their all-time high of $119 in March, Super micro computer (NASDAQ: SMCI) It is trading at a significant discount from its peak. Shares are reeling after allegations regarding the company’s accounting practices and other challenges.
However, despite the bad press, Supermicro’s business continues to thrive amid growing demand for artificial intelligence (AI). Will this be enough to save the stock? Let’s dig deeper to see how the company could perform in 2025 and beyond.
Supermicro is a perfect example of how quickly a Wall Street darling can fall from grace. The crisis began on August 27, when short-selling organization Hindenburg Research released a report accusing the computer manufacturer of accounting manipulation, self-dealing, and evading sanctions related to Russia’s invasion of Ukraine.
The next day, Supermicro announced that it would postpone filing its fourth-quarter report, citing the need to evaluate the effectiveness of its internal controls. Shortly after, its auditor, Ernst & Young, resigned. These events raised further suspicions and raised the possibility of the company doing so It is written off from NasdaqWhich may harm its liquidity and make the shares less attractive to institutional investors.
While Supermicro’s share price has collapsed over the past few months, there has been some light at the end of the tunnel. For starters, the company has found a new auditor (BDO USA). On December 6, it received a deadline from Nasdaq, giving it until February 25 to file its overdue annual reports. Meanwhile, business seems to still be booming.
Perhaps Supermicro’s big break came in November, when an independent special committee released unaudited earnings statements. The company expects fiscal first-quarter sales of $5.9 billion to $6 billion. While this is lower than previous guidance of $6 billion to $7 billion, it represents a 180% growth rate compared to the same period a year earlier.
Supermicro’s growth rate dwarfs other AI leaders like them Nvidia and Advanced micro deviceswhich saw its profits grow by 94% and 17%respectively, In their final quarters. Supermicro’s explosive momentum Probably so It persists because of its pick-and-shovel exposure to AI opportunity.
It turns super micro Graphics processing units (graphics processing units) made by Nvidia and other chipmakers into off-the-shelf computer servers for data centers, giving them an intermediary role in the AI hardware market. Next-generation AI GPUs like Nvidia’s Blackwell or AMD’s MI350 are likely to boost demand for their servers because their technical advantages may make them must-haves for companies that want to stay competitive.
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