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Super Micro Computer (SMCI) was undoubtedly one of the biggest success stories in the artificial intelligence (AI) space… at least initially. However, this high-flying AI play has hit turbulence, with regulatory hurdles and accounting concerns weighing on investor sentiment. The trouble began when Hindenburg Research alleged financial irregularities, casting doubt over Super Micro’s books, and the situation worsened when the company itself delayed both its 10-K annual report and 10-Q quarterly filings with the SEC.
As a result, Super Micro now faces a pivotal deadline to file its missing reports by Feb. 25 or risk delisting from the Nasdaq, a scenario that could greatly impact the stock’s liquidity, institutional ownership, and overall investor sentiment. Yet, interestingly, this isn’t uncharted territory for Super Micro. Back in 2018, the company was delisted from the Nasdaq due to a similar financial reporting lapse, only regaining its listing in 2020 after spending over a year rectifying its filings.
With its past regulatory struggles still fresh in investors’ minds, Super Micro is once again racing against the clock. On Feb. 11, CEO Charles Liang reassured investors that the company is working diligently to meet the deadline to file its delayed fiscal 2024 annual report along with its first and second-quarter filings for fiscal 2025 on time to avoid Nasdaq delisting. While this statement offered some relief, with the Feb. 25 deadline fast approaching, should investors buy, sell, or hold SMCI stock now?
About Super Micro Computer Stock
San Jose-based Super Micro Computer (SMCI) specializes in high-performance, energy-efficient server solutions. The company designs and manufactures rack-mounted and blade servers, motherboards, power supplies, and chassis, leveraging in-house expertise to meet the demands of AI, cloud computing, and enterprise data centers. With operations in the U.S., Taiwan, and the Netherlands, Supermicro scales globally while prioritizing sustainability through its green computing initiatives.
The company’s market cap presently stands at $28.1 billion. Super Micro is off almost 61% from its March highs last year, weighed down by concerns over governance and delays in filing investor reports. While the stock started bouncing back in late 2024 after a special committee said “no evidence of misconduct” was found, SMCI had already fallen so much by then that it was dropped from the Nasdaq-100 Index ($IUXX) in December, just five months after being added.
Nevertheless, the CEO’s recent reassurances have further uplifted investors' optimism. Over the past three months alone, shares of this AI server specialist have climbed a stunning 113%, dwarfing the broader S&P 500 Index’s ($SPX) 2.8% gain. Meanwhile, so far in 2025, the stock has returned an impressive 97% versus the SPX’s 4% gain on a YTD basis.
Despite its strong performance over recent months, SMCI stock remains relatively affordable from a valuation standpoint. Trading at 19.48 times forward earnings and 1.66 times sales, the stock is priced below its sector medians of 25.38x and 3.35x, respectively.
A Closer Look at Super Micro Computer’s Financials
The last official earnings report from Super Micro came on Aug. 6, when it released its fiscal 2024 Q4 earnings results, which sparked a sharp selloff, with the stock plummeting over 20% in the next trading session.
While the company posted impressive 143.6% year-over-year revenue growth, reaching $5.3 billion and surpassing expectations, it fell short on adjusted earnings per share, reporting $6.25. Additionally, a drop in gross margins to 11.2% from 17% in the same quarter of last year raised red flags for investors, fueling concerns about the company’s profitability even with its booming revenue growth.
Despite these concerns, the stock found some relief following the company’s Feb. 11 update on its preliminary fiscal 2025 Q2 earnings. While the results still fell short of Wall Street estimates, the stock closed up more than 2% in the next trading session, fueled by management’s confidence that they will meet the Feb. 25 deadline for filing the fiscal 2024 annual report. Plus, management’s expectations for a material improvement in fiscal 2026 further helped restore investor optimism.
For Q2, Super Micro is projecting net sales between $5.6 billion and $5.7 billion, marking 54% year-over-year growth at the midpoint, while both GAAP and non-GAAP gross margins are predicted in the range of 11.8% to 11.9%. Also, adjusted EPS is expected to land between $0.58 and $0.60, reflecting only a 5% year-over-year increase.
As of Dec. 31, the company anticipates holding around $1.4 billion in cash and cash equivalents, with total debt standing at approximately $1.9 billion. Meanwhile, Super Micro revised its fiscal 2025 revenue forecast, now expecting between $23.5 billion and $25 billion, a step down from its earlier guidance of $26 billion to $30 billion. Despite this short-term setback, the company remains bullish on the future, projecting a robust $40 billion in revenue for fiscal 2026.
What Do Analysts Expect for Super Micro Computer Stock?
Overall, Wall Street appears skeptical about SMCI stock, maintaining a consensus rating of “Hold.” Of the 13 analysts offering recommendations, two advise a “Strong Buy,” two suggest a “Moderate Buy,” seven give a “Hold,” and the remaining two maintain a “Strong Sell.” The average analyst price target of $52.68 indicates potential upside of nearly 10% from current levels, while the Street-high target of $100 signals that the stock can rally as much as 108.7% from current levels.
As the Feb. 25 deadline to file crucial reports looms, investors should tread carefully before making any bold moves on Super Micro Computer stock. While the stock’s recent gains and CEO assurances offer a glimmer of hope, the looming threat of Nasdaq delisting alongside its preliminary Q2 top line missing estimates creates uncertainty. With analysts sticking to a cautious “Hold” rating, it might be best for investors to wait and carefully monitor SMCI’s next moves.
