NEW YORK, NY – Shares of Super Micro Computer Inc. experienced a decline after a report from Hindenburg Research, outlining concerns about the company’s financial practices. The maker of server equipment, previously viewed as a beneficiary of the artificial intelligence boom, saw its stock drop significantly following the publication of the report.
Hindenburg Research highlighted various red flags in Super Micro’s accounting, detailing undisclosed related party transactions, sanctions, export control failures, and customer issues. Despite the initial drop in stock value, Super Micro managed to mitigate some of the losses by the end of trading, finishing down 2.6%.
An analyst at Bloomberg Intelligence, Woo Jin Ho, mentioned that the report from Hindenburg Research could prompt increased scrutiny on Super Micro’s accounting practices and customer transactions. The concerns raised in the report are not new, but they could bring more attention to the company’s client relationships, particularly in light of heightened US oversight on AI-systems sales to sanctioned entities.
Super Micro had previously settled an investigation by the US Securities and Exchange Commission regarding its accounting and disclosures for specific fiscal years, taking corrective actions and paying penalties. The company’s revenue has seen substantial growth, more than doubling to $14.9 billion in the last fiscal year, with expectations of reaching $28 billion in the current fiscal year.
Despite challenges related to the profitability of AI-optimized servers, Super Micro remains a key player in the industry. The company’s stock fluctuations, including significant gains over the past years, have drawn attention from investors and analysts alike. Hindenburg Research, known for its critical analysis of various companies, has recently focused on other entities, such as Axos Financial Inc. and Icahn Enterprises LP.
Investors and industry experts will be closely monitoring Super Micro’s response to the report and its impact on the company’s operations moving forward. As the technology landscape continues to evolve, the scrutiny on companies operating in the AI sector is likely to intensify.