Super Micro stock surges 30% after investigation clears fraud accusations, but faces delisting concerns.

From Nasdaq: 2024-12-03 22:53:28

Server maker Super Micro Computer (SMCI) stock surged 29% following the release of an investigation clearing management of fraud or misconduct. The stock now trades at $42 per share, up 133% from recent lows. SMCI faces potential delisting for failing to file financial reports but has appointed a new auditor to regain compliance.

SMCI stock has outperformed the market in the past 3 years, with returns of 39% in 2021, 87% in 2022, and 246% in 2023. Despite recent gains, the stock is still down 60% from its all-time highs. While SMCI benefits from the AI market, questions about governance and financial reporting remain.

Revenues for Super Micro Computer doubled in FY’24, driven by demand for server systems in the generative AI space. Consensus estimates suggest an 80% revenue increase for the current fiscal year. However, concerns about corporate governance and financial reporting persist. With a reasonable valuation at 15x consensus 2024 earnings, investors may want to wait for the new auditor’s approval before investing.



Read more at Nasdaq: Why Super Micro Stock Surged 30% On Monday