Is It Safe to Buy Super Micro Computer Stock?

If you have been an investor in artificial intelligence (AI) server maker Super Micro Computer (SMCI), chances are that your stress levels have been higher than normal lately. A simple glance at the stock's 9-month price range, from March highs near $122.90 to its Nov. 15 lows at $17.25, tells quite a colorful story on its own - and is enough to drive away many investors who had previously bet on the company's long-term prospects.

It started in August with poorly received earnings, then accelerated quickly when short seller Hindenburg Research published a scathing report accusing the company of accounting manipulation and fraud. The company then said it would delay filing its 10-K report for fiscal year 2024, and now risks being delisted from the Nasdaq for the second time in six years as investors continue to await audited financial results. More troubling, its auditor, Ernst & Young, resigned, after the “Big 4” auditor said it was “unwilling to be associated with the financial statements prepared by management.”