Super Micro Computer (SMCI) said in its latest SEC filing that its financial reporting controls were “not effective” as of June 30 because of “material weaknesses.” The server maker, which has been one of the biggest winners of the AI boom, noted that it has begun to take steps to fix the problems but cannot guarantee that the fixes will be enough or that new issues will not appear.
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The company also cautioned that these weaknesses could affect its ability to report results on time and accurately.
SMCI Stock Slumps Post-Q4 Earnings
Super Micro’s filing comes weeks after it released lower-than-expected results for Q4 FY25 on August 5. Its sales rose 7.4% year-over-year to $5.8 billion but missed the consensus estimate of $5.98 billion. Meanwhile, adjusted EPS declined 24.1% to $0.41 and came in below the analysts’ expectations of $0.45 per share.
The company also lowered its Fiscal 2026 revenue outlook by $7 billion, which rattled investors.
Since the report, the stock has fallen 23%, adding to worries already heightened by its financial control problems. However, even with the pullback, the stock is still up about 44% so far in 2025, following a massive rally earlier in the year on optimism for AI-driven server demand.
Is SMCI Stock a Good Buy?
Currently, Wall Street has a Hold consensus rating on Super Micro Computer stock based on five Buys, eight Holds, and three Sell recommendations. The average SMCI stock price target of $45.31 indicates about 3.05% upside potential.
