Shares of Super Micro Computer soared 31% on Tuesday after the company announced the appointment of BDO as its new auditor and submitted a compliance plan to Nasdaq to maintain its listing. This development has fueled optimism among investors, leading to a more than 50% rise in the company’s stock over the past two trading days. Despite this recovery, the company’s value remains significantly diminished, having lost nearly three-quarters of its market capitalization—approximately $54 billion—since its peak in March.
Auditor Appointment and Compliance Plan
Super Micro has been working to address its delayed filings with the Securities and Exchange Commission (SEC). The delay stems from the resignation of its previous auditor, Ernst & Young, in October, just months after the firm had replaced Deloitte & Touche in March 2023. In its latest statement, the company expressed confidence in filing its overdue annual report for the fiscal year ending June 30 and its quarterly report for the period ending September 30. The Nasdaq exchange will now review the company’s compliance plan, a process that analysts estimate could take two to five weeks.
CEO Charles Liang emphasized the significance of BDO’s appointment, calling it a critical step in Super Micro’s efforts to bring its financial statements up to date. Liang stated that the company is pursuing this task with urgency and diligence.
Stock Performance and Market Context
Super Micro’s stock price skyrocketed more than twentyfold between early 2022 and March 2023, benefiting significantly from the artificial intelligence (AI) boom and its partnership with Nvidia. Last fiscal year, the company’s sales more than doubled, reaching $15 billion. Super Micro also gained recognition in March 2023 by being added to the S&P 500 index, reflecting its rapid growth and soaring stock price.
However, the company’s troubles began to surface shortly afterward. In August, it announced delays in filing its annual report, raising red flags among investors. Shortly after, Hindenburg Research, a prominent short-seller, published a report accusing the company of accounting irregularities. This was followed by news that the Department of Justice had launched a preliminary investigation into the company’s financial practices.
In September, Super Micro’s stock received a formal notification from Nasdaq regarding its non-compliance with listing rules due to the delayed filing of its annual report. The company had until Monday to either file the overdue report or submit a plan to regain compliance, which it has now done.
Role in the AI Market
Super Micro remains a key player in the AI hardware market, largely due to its relationship with Nvidia. On Monday, the company announced the sale of new products featuring Nvidia’s next-generation AI chip, Blackwell. Super Micro competes with companies like Dell and Hewlett Packard Enterprise in packaging Nvidia’s AI chips for broader market use, solidifying its role as a major supplier in the rapidly growing AI sector.
Challenges Ahead
While the recent developments have provided a boost to Super Micro’s stock, challenges remain. The company’s ability to regain investor confidence will depend on successfully addressing the allegations of financial misconduct and maintaining compliance with Nasdaq rules.
Despite these hurdles, the company’s strong position in the AI market and its recent steps toward resolving financial issues have renewed investor optimism. For now, all eyes remain on Nasdaq’s review of Super Micro’s compliance plan, which will determine whether the company can sustain its recovery and stabilize its position in the market.
