Super Micro Computer (NASDAQ: SMCI) stock has been falling in recent months. However, the latest information from the company shows that the stock is soaring today. Investors are concerned about declining profit margins, questions about accounting practices and delays in filing Supermicro’s 10-K annual report. However, the company says sales are still strong.
These issues have caused the stock price to drop 44% over the past three months. That said, today’s update pushed the stock up by nearly 18%. As of 12:30 p.m. ET, Supermicro stock was still up 13.8%.
Stock split momentum
Supermicro supplies server and storage system components to data centers building artificial intelligence (AI) capabilities. Data center growth is exploding as technology companies seek maximum computing power to train their AI models. Supermicro’s sales increased at the same time. Following this earlier this year, the company conducted a 10-for-1 stock split, which took effect on October 1st.
However, due to accounting issues and other issues, the stock price has not gained any momentum since the stock split. Today, Supermicro announced strong sales of server systems that include liquid cooling solutions. Since June, the company has shipped more than 2,000 water-cooled server racks. Additionally, on a quarterly basis, “more than 100,000 GPUs (graphics processing units) with liquid cooling solutions (direct liquid cooling) will be installed in some of the largest AI fabs ever built.” It added that it is introducing.
Delivering music to investors’ ears
This was the news investors wanted to hear as the company works toward releasing its delayed annual report. Until then, questions remain regarding past accounting practices and performance. But the company seemed to reassure some investors that it is still selling server systems at a rapid pace.
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Mr. Howard Smith holds a position at a supermicrocomputer. The Motley Fool has no position in any stocks mentioned. The Motley Fool has a disclosure policy.
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