Stock in Super Micro Computer Experienced Another Surge Today. Should Investors Consider Purchasing Now?
Stock in Super Micro Computer Experienced Another Surge Today. Should Investors Consider Purchasing Now?
Shares of Super Micro Computer (SMCI, increasing by 5.39%), previously popular in the realm of artificial intelligence (AI) server stocks, witnessed another upward swing today. Following a series of weeks filled with declines due to allegations that originated from a short-seller attack and a hold-up in its 10-K filing, the stock has made a remarkable comeback since November 15. This shift in fortune can be attributed to the company hiring a new auditor and crafting a strategy to adhere to the Nasdaq stock exchange's regulations.
The stock leaped by 15.9% today, which equates to twice its November 15 value.
Supermicro Capitalizes on the Upturn
No fresh company news emerged regarding the stock today, yet the shares maintained their upward trajectory as investors seemed to perceive the risk attributable to the stock to have substantially decreased following the company's announcement to comply with Nasdaq's rules and the hiring of a new auditor.
Furthermore, a brief-term boost might be contributing to the stock's rise, driven by traders who don't wish to miss out on the rebound.
Nonetheless, the company still encounters several obstacles before it can fully recuperate. Despite its attempt to submit the 10-K and provide a projected date for filing, its 10-Q for the first fiscal quarter remains overdue, highlighting its accounting issues amid its efforts to rectify the discrepancies that caused the delays in filings and the departure of its previous auditor, Ernst & Young.
Is Super Micro Computer a Wise Investment?
The stock's rebound last week, sparked by the company's announcement of a filing extension with Nasdaq and the appointment of a new auditor, was rational, but the stock's continuous climb appears to be solely fuelled by momentum.
At present, the stock continues to be a high-risk choice. It is not advisable as a long-term investment until it settles its outstanding accounting issues.
Moreover, the positive sentiment around Super Micro Computer's financial recovery has led to an increase in discussions about potential investing opportunities.
In light of the company's financial recovery and improving regulatory compliance, some analysts are suggesting that now might be an advantageous time for careful investors to consider entering the market.