The stock of Super Micro Computer (SMCI) is pulling back as the server maker prepares to report its latest financial results and provide investors with an update on its business.
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SMCI stock is down 5% hours before the company’s management team is to deliver their latest financial results after markets close on Feb. 11. The decline ends a massive rally in recent days that saw Super Micro Computer’s stock rise nearly 60% in the past five trading days, including an 18% surge on Feb. 10.
Shareholders have been on a wild ride with the stock over the last year. SMCI stock hit an all-time high last spring and was added to the benchmark S&P 500 index in March 2024, only to see the share price crash 85% over the next eight months after the company was accused of accounting malfeasance and its auditor resigned.
Optimism Returns
But now, with the company’s quarterly earnings report on deck, SMCI stock has been rallying once again. Less than two months into the year, and the share price is up 35%, trouncing the 2.1% gain seen in the technology-laden Nasdaq index.
Investors and some analysts remain bullish on Super Micro Computer’s opportunity in artificial intelligence (AI), as its servers run the microchips and processors from Nvidia (NVDA) that power AI applications and models.
At the same time, Super Micro Computer’s management team is due to provide and important update on whether the company will submit its annual account documents ahead of a Feb. 25 deadline or risk being delisted from the Nasdaq exchange on which its stock trades.
Is SMCI Stock a Buy?
The stock of Super Micro Computer has a consensus Hold rating among five Wall Street analysts. That rating is based on one Buy, three Hold, and one Sell recommendations issued in the past three months. The average SMCI price target of $29.75 implies 24.07% downside risk from current levels.
