2024 is almost over and what a year it has been for Super Micro Computer (NASDAQ: SMCI). Carried on a wave of AI euphoria, in the early part of the year, the stock was one of the market’s biggest winners. Until it wasn’t any longer. Plagued by allegations of financial misdeeds, the resignation of auditor E&Y and facing delisting from the NASDAQ for failing to submit its 10-K on time, the stock tanked throughout the second half of the year.
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But could the tide be turning again? With a new auditor in tow, and the Special Committee formed to look into the financial reporting finding no evidence of misconduct or fraud, shares of the AI server maker have been in recovery mode.
The end of last week brought further good news as in an 8-K filing late Friday, the company announced that NASDAQ had granted an extension for submitting its 10-K and 10-Q reports. The new deadline for filing is February 25, 2025. In the meantime, the company will keep its listing as it works on the filings with help from its new auditor.
So, does this finally bring to an end all the recent drama? Possibly, says Lynx Equity analyst KC Rajkumar. While many were bracing for a delisting, Rajkumar took a contrarian stance weeks ago, setting a $45 price target and suggesting the delisting fears were overblown.
“Our view was based on belief that SMCI held a uniquely critical position in the all-important business of installing AI infrastructure,” Rajkumar explained. “Delisting the stock would cut off access to capital and result in impaired progress in AI data center build out. We also opined that the odds of alternatives such as DELL picking up share from SMCI were not quite as high as many thought.”
With the NASDAQ decision made, Rajkumar thinks investors could be returning to this name, while brokerages that stopped covering the stock could start doing so again. Whether the company successfully files the documents by the deadline in a manner that meets requirements remains to be seen. “However,” Rajkumar went on to say, “for the next 2+ months, until the filing deadline in February, the event-driven volatility is likely to wind down while investors turn their focus to company fundamentals. And that is reason enough to raise our PT.”
That price target moves from $45 to $60, suggesting the stock can climb 36% higher over the coming months.
The Street’s average price target, however, remains a more downbeat $38.57, implying shares will correct by ~5% in the months ahead. Meanwhile, the analyst consensus rates the stock a Hold (i.e. Neutral), based on 5 Holds, and 2 Buys and Sells, each. (See SMCI stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
