Shares of Super Micro Computer (SMCI) soared about 40% in after-hours trading yesterday on news of hiring a new auditor and averting delisting from the Nasdaq. Shares also gained 15.9% in regular trading on November 18, as investors speculated the news. The server maker’s 60-day deadline to submit a plan to regain compliance with Nasdaq’s listing requirement was supposed to end yesterday.
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More on SMCI’s New Auditor and Action Plan
SMCI hired BDO USA, P.C. as their new independent auditor, effective immediately, after Ernst & Young abruptly stepped down from that position in October. BDO is said to be among the top five accounting firms globally and renowned for its audit and insurance solutions, SMCI added.
President and CEO Charles Liang noted that SMCI was happy to bring BDO as an auditor and make its financial accounts current. Furthermore, the company submitted a plan to file its 10-K annual report for the year ending June 30, 2024 and quarterly report for the period ending September 30, 2024 to the SEC within the stipulated time frame. Submission of the delayed reports will ensure that SMCI becomes current with its financial reporting.
Good Days Are Here Again
For now, SMCI stock will continue to be listed on the Nasdaq until the exchange reviews its compliance request for the time extension. Touted as one of the biggest beneficiaries of the AI (artificial intelligence) boom and also gaining attention as a customer of Nvidia’s (NVDA) chips, SMCI quickly became one of the most watched stocks in 2024.
However, a series of bad news dragged down SMCI stock. Short seller Hindenburg Research accused SMCI of accounting malpractices in August, while Ernst & Young stepped down as the company’s auditor in October. These unfavorable aspects brought down SMCI shares by 65.5% in the past three months.
On the business side, SMCI seems to be doing well. Just yesterday at the Supercomputing Conference in Atlanta, SMCI announced that it has designed and deployed next-generation AI servers capable of using Nvidia’s Blackwell chips. This is a big step for SMCI since the Blackwell platform is one of the most awaited products in the AI domain currently. It seems like good days are back again for SMCI and only time will tell if the company is able to comply with the plan and take off the delisting pressure for good.
Is SMCI Stock a Good Buy?
Wall Street is skeptical about SMCI stock and prefers to remain on the sidelines until the dust settles. However, after yesterday’s news, analysts could revisit their recommendations.
Currently, SMCI stock has a Hold consensus rating on TipRanks. This is based on three Buys, six Holds, and two Sell ratings. The average Super Micro Computer price target of $47.04 implies 118.4% upside potential from current levels. Meanwhile, year-to-date, SMCI shares have declined 24.2%.
