Super Micro Computer (NASDAQ:SMCI) had a rollercoaster year in 2024, delivering wild swings in both share prices and investor sentiment.
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While the company benefited from robust partnerships with industry giants like Nvidia and Broadcom in the AI server market, it faced mounting scrutiny over potential financial improprieties. The public departure of its auditor in late October was a particularly tough pill to swallow, and came on the heels of SMCI missing its 10-K filing with the SEC at the end of August. These setbacks have left the company at serious risk of being delisted from the Nasdaq.
Despite the storm, SMCI shares have shown signs of recovery since hitting rock bottom in mid-November. The company has pledged to regain its footing, committing to file the necessary documents with its newly appointed auditor by February 25.
In fact, one investor, known by the pseudonym DT Invest, believes that meeting this deadline will provide quite the boost for SMCI shares.
“From the business perspective Super Micro Computer still looks rock-solid with massive revenue growth, positive EPS dynamic, and extremely strong AI tailwinds behind the back,” the investor claims.
DT Invest cites SMCI’s strong revenue growth, with preliminary reports projecting a 181% year-over-year increase in FQ1 2025, bringing revenue to approximately $6 billion. Meanwhile, profits are also on the rise, with EPS anticipated to increase by about 122% year-over-year in the same quarter.
Beyond the finances, DT is positively bullish regarding the continuing demand for AI, with growing investments from the megascalers to build out their AI capabilities.
In the investor’s mind, the only major issue weighing on share prices is the concern over SMCI’s ability to satisfactorily meet its February 25 filing deadline. These worries, however, are not deterring DT, who concludes: “Recent developments regarding the company’s SEC filing issues appear positive to me.”
Believing that SMCI is “dirt cheap,” DT Invest assigns the company with a Strong Buy rating. (To watch DT Invest’s track record, click here)
Wall Street, on the other hand, is taking a decidedly wait-and-see approach. With 1 Buy, 5 Hold, and 2 Sell ratings, SMCI holds a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $27.75 would translate into losses of ~9%. (See SMCI stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
