Despite ongoing volatility, the stock of Super Micro Computer (SMCI) was the top-performing security in the benchmark S&P 500 index during February.
SMCI stock gained 43% over the past month, with about half that gain coming after the company filed updated and audited financial results with the U.S. Securities and Exchange Commission (SEC) ahead of a deadline that could have seen its stock delisted from the Nasdaq exchange on which it trades.
Super Micro Computer’s stock also rallied during February as investors continue to see the company as a leading beneficiary of the artificial intelligence (AI) revolution that’s taking place. However, while the rally over the past month was impressive, SMCI stock is still down 53% over the last year.
Financial Concerns
While it sits atop the S&P 500 index today, SMCI stock was brutalized last autumn and leading into this year as concerns were raised about the company’s finances and internal accounting processes. Last year, Super Micro delayed filing its annual report with the SEC, lost its auditor Ernst & Young over governance issues, and was accused of accounting malfeasance by a notorious short seller.
Super Micro Computer was removed from the Nasdaq Composite index once before, in 2018, and subsequently listed again in January 2020. In a note to investors at the beginning of February, the company vowed not to make the same mistake twice. Super Micro Computer is expected to benefit from the AI infrastructure buildout as its servers run Nvidia (NVDA) microchips and processors.
Is SMCI Stock a Buy?
The stock of Super Micro Computer has a consensus Hold rating among nine Wall Street analysts. That rating is based on three Buy, four Hold, and two Sell recommendations issued in the past three months. The average SMCI price target of $45.75 implies 11.83% upside from current levels.
