Supermicro Computer, Inc.’s (SMCI) shares have gained 83.5% this year, outperforming the Computer-Storage Devices industry’s 17.3%. The company’s recent business update has boosted investor confidence, with no accounting issues anticipated in its highly-anticipated 10-K filing.
However, last year’s performance was marred by concerns over accounting violations and a DOJ investigation. Supermicro received a non-compliance letter from the Nasdaq, which raised the possibility of being delisted from the tech-heavy index. The situation worsened with the announcement of a delay in filing its annual 10-K report.
This year, management is working to publish last fiscal year’s 10-K report before February 25. Supermicro has switched auditors due to management disputes, but now works with accounting firm BDO, ensuring timely SEC report filings. The company’s revenue growth estimates have also improved, with CEO Charles Liang predicting revenues of $40 billion next year.
The demand for Supermicro’s direct-liquid cooling technology is expected to spike next year due to data centers’ heat issues, which could boost sales. With its shares trading above the 50-day short-term moving average, an uptrend is imminent.
Considering these factors, it may be wise to hold onto Supermicro stock in the long run, as its synergy with NVIDIA Corporation through the Blackwell platform has boosted artificial intelligence computing power and operational efficiency. The company’s use of energy-efficient technologies also aligns with global environmental regulations tightening.
However, skeptics may prefer to wait until February 25 for a better financial insight before betting on the SMCI stock. As it stands, the stock remains reasonably priced with a forward earnings multiple of 20.3X.
Source: https://www.nasdaq.com/articles/should-you-buy-hold-or-sell-smci-stock-filing-deadline