The saga of Super Micro Computer was one of the most unexpected and intriguing stories in the stock market in 2024. Whereas Super Micro stock (NASDAQ: SMCI) was a bigger winner in the first half of the year, things took a severe turn for the worse in the year’s latter half.
After now-defunct activist short-selling group Hindenburg Research released a scathing report alleging widespread accounting malpractice at the semiconductor company on August 27, SMCI shares began to tumble. Further developments, chiefly the delay in filing key reports and the resignation of the company’s editor, Ernst & Young (EY), put even more pressure on SMCI stock.
At one time, it even appeared as if the business would be delisted from the NASDAQ exchange. In November, the price of Super Micro stock dropped to its lowest point — just $18.01.
Picks for you
Since then, however, the price of Super Micro shares has increased to $50.93. Year-to-date (YTD) gains stand at 66.65%, and a lion’s share of those returns — 56.56%, to be exact, occurred in the last 30 days.
Super Micro has yet to file the necessary documentation in order to avoid delisting. The company’s latest results were relatively disappointing. Let’s take a closer look at why SMCI stock is surging, in spite of all of those factors.
Super Micro stock rallies on long-term outlook and compliance commitment
After market close on February 11, Super Micro held its Q2 2025 earnings call. In anticipation of the report, the price of SMCi stock dropped from $42.65 a day prior to $38.61. With the 9.47% dip factored in, the result — a double miss, with both revenues and earnings per share (EPS) below estimates, didn’t cause additional losses.
On the contrary — looking at price action between the quarterly report and the time of publication, we can see a 31.90% surge in price. So, what happened?
It seems like markets were focusing on the company’s long-term revenue guidance — which forecast $40 billion in revenue in fiscal 2026 on account of the artificial intelligence (AI) boom. To boot, management referred to that estimate as ‘conservative’ in the call — and the markets seem to agree with the sentiment.
Secondly, the earnings call also included a long-awaited update regarding Super Micro Computer’s compliance issues. While the company could have requested a 180-day extension from the NASDAQ, it stated that it would submit the necessary documentation by the original February 25 deadline — in a move that doubtlessly goes a long way in removing some of the baggage from Hindenburg’s August report.
In addition, technical analysts have recently noted that Super Micro stock has broken out of a bullish flag pattern — if legitimate, it could signal an upcoming move to levels closer to the $65 mark.
Featured image via Shutterstock
