A relief meeting inside Super microcomputer (NASDAQ:SMCI) Shares are back on track today after taking a breather on Wednesday. Shares of the artificial intelligence (AI) server stack provider exploded higher on Tuesday after the company announced plans to address questions about corporate governance and accounting.
That rally stalled yesterday, with some investors taking profits as uncertainty remained over Supermicro’s underlying business. But a clue that things are still on track came during the Nvidia earnings call yesterday. That helped spark the rally again today, sending shares up 14.2% as of 2:25 PM ET.
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Shares of Supermicro are now up 65% in a week, but the company still has work to do.
Supermicro has delayed the filing of its last two financial reports with the Securities and Exchange Commission (SEC) as it works to resolve accounting issues. The last accountant resigned, causing even more concerns. As a result, Supermicro was on the verge of being delisted from the Nasdaq Stock Exchange.
But the company provided a plan to the stock exchange to remain publicly traded and announced Monday that it has hired a new accountant. The stock rose on that news, but questions remain.
Investors still have to wait for the financial reports to be submitted and signed by the accountant. Even in the best-case scenario, Supermicro has said sales for the most recent two quarterly periods would be lower than expected. However, this is understandable, as some customers wanted to avoid uncertainty about orders. Data centers with AI servers are under construction and any delays in ordering equipment would be costly.
Nvidia CEO Jensen Huang said yesterday that demand for its AI chips and platforms remains “incredible.” And during Nvidia’s earnings call to investors last night, Huang addressed some concerns regarding Supermicro’s server business. Juang talked about Nvidia’s partner companies and mentioned Supermicro among other server rack vendors.
That Supermicro continues to work with Nvidia is a good sign that the underlying business continues to resolve the issues. Investors cheered that fact today.
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