Super Micro Computer (NASDAQ: SMCI ) The stock was crushed today following reports that the company is being investigated by the Department of Justice (DoJ). The server specialist’s share price was down 12.2% in intraday trade, having fallen as much as 18.6% in the previous session.
The Wall Street Journal It was reported today that the DoJ is in the early stages of conducting an investigation into Supermicro. According to the report, the investigation may be related to allegations of improper accounting practices Short seller The note was published by Hindenburg Research at the end of August.
Following today’s big selloff, Supermicro stock is down 66% from its highs reached earlier this year. Despite the rating withdrawal, the company is still on track to continue with 10-to-1 Stock split It is Oct. 1 with effect from
Will Supermicro buy ahead of its stock split?
Supermicro has come under some serious pressure lately, but the negative sentiment surrounding the stock may be overblown. For starters, the DoJ has yet to announce an official investigation. Even if an investigation takes place, it does not necessarily mean that there has actually been any wrongdoing.
The Justice Department typically applies greater scrutiny to large tech and financial firms, including launching antitrust lawsuits against them. Apple, lettersAnd visa. Supermicro is unlikely to face antitrust scrutiny, but the DoJ’s recent actions provide background context that should be kept in mind.
Had the DoJ’s investigation into Supermicro been ongoing, Hindenburg’s allegations that he found evidence of new accounting violations by the tech giant would have been a major motivating factor. But it’s important to remember that Hindenburg is a short seller, and it’s profitable during valuations for companies.
Because of the lack of visibility from the company’s perspective, Super Microcomputer stocks may not be a good fit for investors without an above-average risk tolerance. On the other hand, investors who are willing to embrace risk and uncertainty can reap big returns by viewing the recent sell-off as a buying opportunity.
Following today’s stock pullback, Supermicro is now trading at just 12 times this year’s expected earnings and less than 85% of expected sales. That’s a cheap-looking value for a company that’s seeing stellar sales and revenue growth thanks to artificial intelligence (AI)-driven demand, even with expectations that the business cycle will moderate. If the tech giant succeeds with the liquid-cooling technologies that help differentiate its high-performance rack servers, Supermicro stock could roar back beyond recent controversies.
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Super Microcomputer Crashed Today — Oct. Should you buy AI stock before its stock split in 1? Originally Posted by The Motley Fool
2024-09-27 03:31:06