Super Micro Computer Stock Plunges on DOJ Probe Report
$Super Micro Computer (SMCI.US)$ saw its stock plunge 15% on Thursday after reports emerged of a Department of Justice (DOJ) investigation into potential accounting violations.
Key Details
The Wall Street Journal cited sources indicating the probe follows a report from Hindenburg Research, which highlighted "glaring accounting red flags" and undisclosed related party transactions.
Despite the decline, SMCI shares are still up 57% from last year, reflecting strong demand for its AI server equipment amid a booming tech industry.
Despite the decline, SMCI shares are still up 57% from last year, reflecting strong demand for its AI server equipment amid a booming tech industry.
Performance Context
The stock hit highs above $1,200 in mid-March but has faced challenges, including a missed earnings report in August and a delayed 10-K filing.
CEO Charles Liang assured customers that production capabilities remain unaffected, despite the ongoing issues.
CEO Charles Liang assured customers that production capabilities remain unaffected, despite the ongoing issues.
Analyst Reactions
JPMorgan downgraded the stock to Neutral, lowering the price target from $950 to $500. However, nearly 37% of Wall Street analysts still recommend buying, with a projected target of $685 over the next year.
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