Super Micro Computer (NASDAQ:SMCI) is one of the hottest names associated with the AI-led bull market, but not everyone is buying the hype.
A recent report by Hindenburg Research takes aim at the server and storage systems maker, alleging “glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.”
According to Hindenburg, their report stems from a three-month investigation involving interviews with former senior employees and industry experts, as well as a thorough review of litigation records and other relevant documents.
It’s not SMCI’s first brush with controversy. The company was temporarily delisted from the Nasdaq in 2018 due to failing to submit financial statements. Although SMCI reached a $17.5 million settlement with the SEC in August 2020 for accounting violations, Hindenburg says that shortly after, the company resumed its dubious practices.
That bearish view, however, is one countered by Rosenblatt’s Hans Mosesmann, an analyst ranked in the 5th spot amongst the thousands of Wall Street stock pros.
Hans highlights SMCI’s leading position in liquid cooling as key to its prospects, noting: “Supermicro is likely one year ahead of the competition in liquid cooling at scale. This supports the company’s view that it will achieve over 50% market share as the category moves to over 30% penetration in the next couple of years in the DC. The GM profile impacted by mix and expedite charges in June (supply and quick turnaround customer rack setup) is moving up on better mix ($800m customer at higher GM), low expedite charge, and improved liquid cooling scale.”
These comments underpin Mosesmann’s Buy rating on SMCI shares, while his price target of $1,300 suggests the stock will deliver gains of a hefty 137% over the next 12 months. (To watch Mosesmann’s track record, click here)
Looking at the broader analyst community, the average price target is a more conservative $978.50. Nevertheless, this still suggests a robust potential return of ~79% over the next year. The consensus rating for SMCI is a Moderate Buy, based on 5 Buy recommendations, 5 Holds, and 1 Sell. (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.
