Supermicro Computer’s stock has seen significant fluctuations in recent months due to ongoing accounting scandals and concerns about its financial reporting practices. Despite the company filing its delayed annual and quarterly reports, investors may be cautious about getting back into the stock.
The company designs and assembles servers and rack solutions, making it a key player in the AI infrastructure market. However, its business model does not offer high gross margins, and the company has faced pressure from analysts and short sellers over its pricing strategy.
Last month, the company confirmed that it was being investigated by the Department of Justice and the Securities and Exchange Commission (SEC) over potential accounting issues. The stock’s auditor, EY, also resigned in an unusual statement expressing concerns about Supermicro’s governance, transparency, and internal controls.
Although Supermicro has filed its reports with the SEC, its new auditor, BDO, issued an “adverse opinion” on its internal controls, stating that they are ineffective. This raises concerns about the company’s ability to prevent future misstatements in its financial reports.
Despite this, Supermicro still has ambitious growth plans for fiscal 2026, with a revenue target of $40 billion. The stock is currently trading at a cheap valuation (12.5 times forward P/E based on fiscal 2026 analysts’ estimates), which may attract investors to the company.
However, investors who want exposure to the AI infrastructure trend have other options beyond Supermicro, which has a history of accounting issues and limited growth potential due to its low-margin business model.
Source: https://www.fool.com/investing/2025/03/02/supermicro-filed-its-delayed-reports-is-it-all-cle