From Nasdaq: 2024-09-16 05:47:00

Super Micro Computers (NASDAQ: SMCI) experienced a meteoric rise in 2023, with shares up 246%. By mid-March 2024, the stock soared another 318%. However, a recent downturn has seen Supermicro plummet over 60% below its peak. While the company shows promising growth prospects, it’s surrounded by controversy over financial practices.

Reasons to buy Supermicro include its impressive growth potential, with sales spiking 110% in the last quarter alone due to AI demand. The company also offers an attractive valuation compared to competitors, trading at a lower forward P/E ratio. Supermicro’s direct liquid cooling (DLC) technology and potential partnership with Nvidia could further drive growth.

Investors should be wary due to a cloud of controversy surrounding Supermicro, involving allegations of accounting manipulation and sanctions evasion. Hindenburg Research published concerning findings, prompting a delay in Supermicro’s 10-K filing. CEO Charles Liang addressed the issues, reassuring that operational capabilities remain intact.

While aggressive investors may see an opportunity in Supermicro’s beaten-down stock, most should exercise caution and adopt a wait-and-see approach. The controversy and delayed 10-K filing raise red flags that warrant further scrutiny. If the company resolves its issues and regains stability, there may be a future opportunity for investment.



Read more at Nasdaq: 2 Reasons to Buy Supermicro Stock Hand Over Fist — and 1 Reason to Stay Away