SMCI stock performance: analysis of Super Micro Computer stock price trends

Super Micro Computer stock (SMCI -8.20%) is losing ground in Tuesday's trading, the company's share price was down 5.9% as of 3:15 p.m. ET and had been down as much as 9.9% earlier in the day's trading.

Supermicro's Stock Faces Pressure Amid J.P. Morgan's Cautious Outlook

Super micro stock is experiencing a decline following coverage from J.P. Morgan. Although the firm's analysts noted that orders for Supermicro's servers remain strong despite recent controversies, they maintain an underweight rating with a one-year price target of $23 per share, implying a potential downside of around 45% from current levels.

After a recent meeting with Supermicro's management, J.P. Morgan's analysts expressed optimism, believing the company has not significantly lost orders to competitors. Supermicro plans to launch new products in 2025, and production at its Malaysian facility is on track to ramp up in the first half of next year. The company also stated it has sufficient working capital to support quarterly revenues between $5.5 billion and $6 billion, anticipating positive momentum with the rollout of Nvidia's next-generation Blackwell processors for AI.

However, J.P. Morgan's bearish stance highlights ongoing challenges for Supermicro. Despite a solid near-term outlook, the company's share price has been volatile due to recent controversies. Investors are concerned that further developments could trigger significant sell-offs.

Following Ernst & Young's resignation as its financial auditor in October, Supermicro appointed BDO to replace them. This change has allowed the company to proceed with filing its delayed 10-K report for the previous fiscal year, avoiding delisting from Nasdaq. The exchange accepted Supermicro's filing plan last week, shifting focus to the upcoming 10-K filing and future fiscal reports, which are expected to be completed by February 25.

Should Supermicro need to restate past results significantly, its share price could decline sharply. Additionally, the company is reportedly under investigation by the Department of Justice. While demand for Supermicro's core business appears promising, uncertainties remain regarding its stock performance.

SMCI Stock Drops 8.2%

On the stock market today, SMCI shares fell 8.2%, closing at $40.54.

Supermicro's stock reached a split-adjusted record high of $122.90 on March 8, fueled by enthusiasm for supplying servers for artificial intelligence applications.

Late Friday, Supermicro announced that the Nasdaq stock exchange had granted its request for an extension to submit essential filings. The server manufacturer, a partner of Nvidia (NVDA), now has until February 25 to file its 10-K annual report for the fiscal year ending June 30, along with its 10-Q report for the quarter ending September 30.

On August 27, Supermicro's shares plummeted after short seller Hindenburg Research accused the company of accounting manipulation, export control violations, customer issues, and other concerns. The following day, Supermicro disclosed that it would delay filing its annual report on Form 10-K with the U.S. Securities and Exchange Commission.

On October 30, Supermicro revealed in a regulatory filing that its accounting firm, Ernst & Young, had resigned due to financial reporting issues. On November 18, the company announced it had appointed BDO USA as its new independent auditor.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.