Super Micro Computer (SMCI) stock continued its rebound Friday, with shares on target to record a weekly gain of 78%.
Shares of Super Micro — the AI server maker that uses Nvidia’s (NVDA) chips and has a serious cope with Elon Musk’s xAI — rose over 11% in Friday trading to roughly $33. Even with that gain, shares are still far below highs above $120 in March following SMCI’s addition to the S&P 500.
The stock’s rally kicked off Monday in anticipation of Super Micro’s submission of a compliance plan to the Nasdaq (^IXIC) because it looks to avoid delisting. Shares skyrocketed when the corporate officially announced it had submitted the plan and hired a latest auditor, BDO. Super Micro’s prior accountant, Ernst & Young, resigned in late October.
Super Micro has been grappling with the fallout from an August report by short seller firm Hindenburg Research, which pointed to alleged accounting malpractices, violations of export controls, and shady relationships between top executives and Super Micro partners. Following the Hindenburg report, Super Micro delayed filing its annual 10-K and most up-to-date quarterly 10-Q reports to the Securities and Exchange Commission, which put the corporate susceptible to being delisted from the Nasdaq. Super Micro can also be reportedly being investigated by the Department of Justice.
The deluge of bad news has sent shares tumbling over the previous few months. EY’s resignation, particularly, pushed Super Micro stock down greater than 30% in a single day in late October. The accountant wrote in its resignation letter that it was “unwilling to be related to the financial statements prepared by [Super Micro] management.”
Adding to its woes, Super Micro’s fiscal first quarter earnings report on Nov. 5 missed Wall Street’s expectations. As Wedbush analyst Matthew Bryson wrote in a note to investors on the time, the corporate blamed lighter sales on delays of Nvidia’s Blackwell AI chips and issues with its SEC filings. Bryson maintains a Neutral rating on the stock and recently lowered his price goal for shares to $24 from $32.
Other firms akin to Barclays (BCS), Wells Fargo (WFC), and KeyBanc have suspended coverage of the stock.
Super Micro said Monday that it’s on target to submit delayed filings to the SEC “and change into current with its periodic reports throughout the discretionary period available to the Nasdaq staff to grant.”
Wedbush’s Bryson wrote in a separate note on Nov. 19 in response to Monday’s news, “We see retaining a latest auditor is a big positive step for SMCI because it resolves perhaps probably the most substantial concern regarding SMCI’s ability to stay listed … and creates a possible path for SMCI to file its financials and restore NASDAQ compliance.”