Supermicro shares soared 12% on Wednesday after the server maker submitted its delayed financial reports just ahead of a deadline to avoid being delisted by the Nasdaq. This compliance confirmation eased investor concerns that the company might not meet the February 25 cutoff date.
Despite facing a more than 40% decline in value over the past year due to accounting and corporate governance allegations, Supermicro’s stock has surged 68% since the start of the year, buoyed by a positive revenue outlook driven by increased demand for AI infrastructure support. The company also expressed its commitment to resolving identified internal control weaknesses.
Key technical levels for investors
Supermicro shares experienced upward movement on increasing volume after breaking out from a falling wedge pattern, though they encountered selling pressure above the 200-day moving average. Investors should monitor key price levels on Supermicro’s chart, with resistance areas around $63, $75, and $96, while major support levels to watch include $48 and $38.
On Tuesday, Supermicro’s stock found support near the 50% Fibonacci retracement level, setting the stage for the subsequent surge. The stock closed Wednesday’s session at approximately $51, although it was down 5% in after-hours trading.
The first overhead area to observe is at $63, near the August countertrend peak and this month’s high. A close above this level could push the shares to $75, where profit-taking may occur for those who purchased the stock at lower prices. Further buying might drive shares toward the $96 mark, an area previously marked by multiple peaks between February and July, just before reaching the stock’s all-time high.
For retracements, the $48 area serves as initial support, just above the 50% Fibonacci retracement level. A deeper pullback could bring the stock to revisit $38, which aligns with historical swing lows and previous price movement.
Analyst perspectives and future outlook
While Supermicro successfully met its filing deadline, challenges remain. BDO, the company’s new auditor, issued an “adverse opinion” regarding some internal controls, necessitating management to address “certain material weaknesses” in its internal processes as stated in its Form 10-K filing. Nevertheless, investor Michael Wiggins De Oliveira emphasized the growth potential of Supermicro, projecting revenues of $40 billion for Fiscal Year 2026.
Wiggins De Oliveira noted the company’s unique liquid-cooling technology and AI server customization as competitive advantages in the AI computing sector, recommending SMCI as a Buy based on the attractive valuation of 22x next year’s free cash flow.
Despite the bullish outlook, Wall Street analysts hold a more cautious stance. The consensus rating for SMCI stock is a Hold, with three Buy, two Hold, and two Sell ratings over the past three months. The average 12-month price target stands at $42.83, indicating approximately 16% downside potential.
Following compliance with Nasdaq requirements, several analysts have adjusted their price targets for SMCI. Ananda Baruah from Loop Capital increased the target to $70 from $50, while maintaining a Buy rating, while Mike Ng from Goldman Sachs raised the target to $40 from $36 but reiterated a Hold rating.
With up-to-date SEC filings and positive revenue projections, Supermicro appears to have a promising path ahead. However, the company must navigate ongoing accounting issues and intense competition within the AI and data center markets to realize its potential.
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