Key moments
- Super Micro Computer’s stock fell sharply by 13% to $36.07, despite the company resolving its accounting compliance issues.
- The company is facing an investigation related to potential illegal export of Nvidia chips.
- Despite the current challenges, Super Micro is moving forward with plans to build a new campus in Silicon Valley to expand its production of liquid-cooled servers.
Super Micro Computer Stock Declines Despite Resolution of Accounting Crisis
Super Micro Computer (SMCI) shares experienced a sharp 13% drop on Monday, closing at $36.07, despite the company having recently addressed its accounting compliance issues. This drop positions the stock 70% below its 52-week high reached last March 8th. The stock has now fallen 29% over the past three trading days, marking its worst performance since a 47% plunge in late October/early November, according to Dow Jones Market Data.
The stock’s recent decline follows a brief period of optimism after Super Micro successfully avoided delisting by meeting its financial filing deadlines. However, the company is now facing headwinds related to an investigation in Singapore regarding the potential use of its servers, along with Dell Technologies servers, in the illegal export of Nvidia chips. Dell Technologies (DELL) also saw a 7% drop, closing at $95.56.
A Dell spokesperson emphasized the company’s commitment to trade compliance, stating, “Dell Technologies maintains a strict trade compliance program and screens all sales orders through its internal screening solution, which includes due diligence related to export and trade compliance. If a customer is not adhering to these obligations, we take swift and appropriate action, up to and including termination of our relationship.”
Super Micro has not yet responded to requests for comment.
Despite these challenges, the company’s accounting concerns appear to be resolved. Mizuho Securities analyst Vijay Rakesh reinstated coverage of SMCI with a Neutral rating and a $50 price target, highlighting the company’s resilient product portfolio and the strong growth of the AI server market.
Rakesh noted increased competition from rivals like Dell Technologies, estimating Super Micro’s global AI server market share to decrease slightly from 25% in 2024 to around 23% this year.
In a move to bolster production, Super Micro announced plans to build a third campus in Silicon Valley, focusing on liquid-cooled servers for data centers. CEO Charles Liang stated the company’s capacity to deliver both air-cooled and liquid-cooled racks, anticipating a growing adoption of liquid cooling solutions in new data centers. The new 3 million square foot facility is expected to create numerous jobs and has received support from San Jose Mayor Matt Mahan. Construction is slated to begin later this year.
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