Super Micro Computer (SMCI) Stock Plunges Despite Five-Day Rally

New York City, United States - Super Micro Computer (SMCI) stock price experienced a significant drop of over 7% in early trading on Tuesday, February 14th. This decline marks the end of a five-day rally that had seen SMCI shares surge by nearly 60%.

Recent Performance and Upcoming Earnings Release

On Monday, SMCI shares soared 18% to almost $43, their highest value since October 2022. This surge was driven by the anticipation of the company's scheduled business update on February 11th. Investors are hoping that this update will provide insights into SMCI's efforts to comply with Nasdaq's requirements and avoid delisting.

Despite this recent gain, SMCI shares have not fully recovered from their all-time high of $123 reached in March 2022. The company's stock has faced challenges in meeting analyst expectations and has been embroiled in controversy following a scathing report from short-selling firm Hindenburg Research.

Hindenburg Research's Allegations and Impact

In August 2022, Hindenburg Research released a report alleging accounting violations, export control breaches, and questionable relationships between SMCI executives and suppliers. This report triggered investigations by the US Department of Justice, an accountant's resignation, and disappointing quarterly earnings.

Nasdaq Delisting Threat and Extension

Subsequently, SMCI faced the threat of delisting by Nasdaq due to delays in its SEC filings. However, in January 2023, Nasdaq granted SMCI an extension to submit its late filings by February 25th. The company has brought on a new accountant and claims that an independent review has cleared it of any misconduct.

Analyst Outlook and Stock Price Forecast

Analysts remain cautious about SMCI stock, with six out of 11 covering the company rating it as Hold. Their consensus price target for the next 12 months is $40.79, slightly higher than the $40.37 closing price on Monday.

SMCI is expected to release its fiscal second quarter earnings for the December period after the market closes on Tuesday.