Shares of Super Micro Computer (SMCI) are blasting 25% higher in pre-market trading this morning after filing its delayed financial reports with the Securities & Exchange Commission by the February 25 deadline. The data center stock dodged a Nasdaq delisting and is sparking another wild ride for investors.
SMCI stock tumbled 12% ahead of the deadline to $45.54 per share, having lost nearly one-third of its value from just last week when it gave its business update. The stock is also 63% below its 52-week high.
Supermicro, as the company is known, filed its fiscal year 2024 10-K report as well as its quarterly 10-Qs for the first and second quarters of fiscal year 2025.
For the full-year of 2024, revenue more than doubled to $14.94 billion, generating a 59% increase in operating income, but an 80% hike in net income to $1.15 billion. Fueled by red-hot server demand for Nvidia’s (NVDA) artificial intelligence Blackwell GPUs, the data center infrastructure stock stockpiled a near-four-fold increase in cash and equivalents, or $1.67 billion.
Second-quarter financials, however, showed revenue rose just 55% to $5.68 billion, with operating income falling 0.8% to $368.6 million. Net income did rise 8% on lower interest and taxes paid while earnings were flat at $0.51 per share.
Supermicro still faces SEC and Justice Dept. probes that it needs to clear and while also needing to scale production. Moreover, its profit growth lags revenue, signaling weaker margins. While investors are betting big on SMCI’s AI server dominance and Nvidia chip demand, short sellers aren't so hopeful with 18% of its shares sold short. That could mean the 25% surge could be shorts covering their position while technicals, including crashing through its 50-day moving average, suggest this is a bounce, not a recovery.
If financials reveal deeper issues or probes escalate, this rally could crash harder than a server meltdown.
