Super Micro Faces New Challenges Beyond Delisting Drama

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Samiat

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Nov 12, 2024
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Super Micro Faces New Challenges Beyond Delisting Drama

Super Micro Computer (SMCI) stock dropped 13% on Monday, extending a three-day decline to 29%—its worst slide since November. While the company met its compliance deadline and avoided delisting, new concerns are emerging.

  • Regulatory Scrutiny: Singapore is investigating whether Super Micro and Dell Technologies servers were used to smuggle Nvidia chips, adding to market jitters. Dell shares also fell 7%.
  • Analyst Outlook: Mizuho Securities reinstated coverage with a Neutral rating and a $50 price target, noting increased competition from AI server rivals like Dell. Super Micro’s market share is expected to slip from 25% in 2024 to 23% this year.
  • Expansion Plans: Super Micro announced plans to build a third Silicon Valley campus focused on liquid-cooled data center servers, expecting up to 30% adoption in new data centers. The 3-million-square-foot facility aims to create hundreds of jobs, with construction starting later this year.
Despite progress on accounting issues, Super Micro now faces regulatory risks and rising competition in the AI server market.
 
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