Super Micro Computer Stock Is Plummeting Today -- Is This a Buying Opportunity Ahead of Its Stock Split?
Super Micro Computer (NASDAQ: SMCI) stock is getting crushed Wednesday. The company's share price was down 26.3% as of 11:30 a.m. ET, according to data from S&P Global Market Intelligence.
Hindenburg Research published a short report on Supermicro yesterday, alleging that the company was a serial offender when it came to bad accounting practices. Unfortunately, the server-hardware specialist seems to have almost immediately lent credence to some of the criticisms in the bearish report. In a press release published this morning, the company announced that it would be delaying the filing of its annual 10-K report with the Securities and Exchange Commission (SEC) for the fiscal year ended June 30.
News that the financial filing is being postponed so that Supermicro can "complete its assessment of the design and operating effectiveness of its internal controls over financial reporting" is spurring big sell-offs for the stock today. But even with today's pullback, the artificial intelligence (AI) stock is still up 41% year to date -- and it's heading for a stock split on Oct. 1.
Is it time to buy Supermicro stock?
Supermicro stock was already a high-risk, high-reward investment play. With the news the company will be delaying its 10-K report, the outlook has become even more speculative. In addition to news that Supermicro's annual filing with the SEC will be delayed, the release of Nvidia's much-anticipated second-quarter results later today could be another major source of volatility.
With so much uncertainty on the horizon, it's not surprising that investors are feeling skittish about Supermicro stock. But today's pullback could be a worthwhile buying opportunity for risk-tolerant investors.
In the press release, Supermicro said that it had not made changes to the quarterly and full-year results that it published on Aug. 6. It's still possible that the company will wind up making performance revisions, but the market may be overreacting due to news of the delayed filing coming so soon after Hindenburg published its critical report. With signs that demand for AI-tailored servers and other hardware remains very strong, treating today's big pullback as a pre-stock-split buying opportunity could be a good move for risk-tolerant investors.
Should you invest $1,000 in Super Micro Computer right now?
Before you buy stock in Super Micro Computer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Super Micro Computer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $786,169!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of August 26, 2024
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Super Micro Computer Stock Is Plummeting Today -- Is This a Buying Opportunity Ahead of Its Stock Split? was originally published by The Motley Fool