Why Super Micro Computer Stock Came Out on Monday

Super Micro Computer (NASDAQ: SMCI) the stock has been under pressure for the past few months. But an update from the company sent shares higher today. Investors have been concerned about shrinking profit margins, questions about accounting practices and the delay in Supermicro filing its annual 10-K report. However, the company says sales are still robust.

These issues have sent the stock down 44% over the past three months. That said, today’s update helped boost the odds by nearly 18%. As of 12:30 p.m. ET, Supermicro stock was still up 13.8%.

Timing of stock split

Supermicro provides server components and storage systems to data centers that are building their artificial intelligence (AI) capability. Data center growth is exploding as tech companies seek maximum computing power to train AI models. Supermicro’s sales rose at the same time. Stocks followed earlier this year, and the company implemented a 10-for-1 stock split that took effect on October 1.

But with accounting questions and other concerns, the stock has not gained any momentum since the stock split so far. Today, Supermicro announced that sales of its server systems, including liquid cooling solutions, were robust. It said it has shipped more than 2,000 liquid-cooled server racks since June. It added that it is on a quarterly pace to deploy “more than 100,000 GPUs (graphics processing units) with liquid cooling (direct liquid cooling) for some of the largest AI factories ever built.”

Music to investors’ ears

That was news investors wanted to hear as the company works to release its delayed annual report. Until then, questions remain about past accounting practices and business results. But the company appears to have reassured some investors that the business is still selling its server systems at a brisk pace.

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Howard Smith has positions in Super Micro Computer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Super Micro Computer Stock Happened on Monday was originally published by The Motley Fool