A demonstration of help in super microcomputer (NASDAQ:SMCI) Stocks are back on track today after taking a breather on Wednesday. Shares of the artificial intelligence (AI) server provider soared on Tuesday after the company announced plans to address corporate governance and accounting issues.
That rally stalled yesterday as some investors took profits as uncertainty persisted regarding Supermicro’s underlying business. But a clue that he is still on the right track came during the NVIDIA earnings call yesterday. That helped reignite the rally today and send shares up 14.2% as of 2:25 pm ET.
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Supermicro shares are up 65% in a week, but the company still has work to do.
Supermicro has delayed filing its latest two financial reports with the Securities and Exchange Commission (SEC) as it works to resolve accounting concerns. Its last auditor resigned, causing even more concern. As a result, Supermicro was nearly delisted from the Nasdaq Stock Exchange.
But the company submitted a plan to the stock exchange to continue trading and announced Monday that it hired a new auditor. Stocks rose on that news, but questions remain.
Investors must still wait for the submission of financial reports and auditor approval. Even in a best-case scenario, Supermicro has said its sales would be lower than expected for the two most recent quarterly periods. However, this is understandable, as some customers may have wanted to avoid the uncertainty associated with orders. Data centers housing AI servers are being built and any delay in ordering equipment would be costly.
Nvidia CEO Jensen Huang said yesterday that demand remains “incredible” for its AI chips and platforms. And during Nvidia’s earnings call for investors last night, Huang allayed some fears related to Supermicro’s server business. Juang talked about Nvidia’s partner companies and mentioned Supermicro among other server rack suppliers.
That Supermicro remains associated with Nvidia is a great sign that its underlying business is continuing as it works to resolve its problems. Investors applauded that fact today.
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