AI Server Maker Super Micro Faces Uncertainty Amid Auditor Resignation
Super Micro Computer Inc (NASDAQ:SMCI) is experiencing a rollercoaster ride on Monday, following last week’s bombshell news that its auditor, Ernst & Young (EY), is resigning. The stock plummeted over 8% early in the day but later rebounded, ending up 4% as investors digest the latest developments.
NVIDIA Steps In to Restructure Orders
Adding fuel to the fire is a report from Asia that NVIDIA Corporation (NASDAQ:NVDA) is taking steps to restructure Super Micro orders, which could significantly impact the AI supply chain. According to sources, NVIDIA is diverting orders to other server manufacturers, including Gigabyte and ASRock, which have secured contracts with Coreweave, a major generative AI compute supplier.
Auditor’s Concerns Spark Governance Fears
The auditor’s resignation has raised serious concerns about Super Micro’s governance, transparency, and internal controls. EY cited issues with the company’s ethical standards, compliance with the COSO Framework, and lack of an independent oversight body. The auditor’s doubts about management’s representations and financial statements have sent shockwaves through the market.
Super Micro’s Struggles Pre-Date Auditor’s Resignation
The company was already reeling from a short report by Hindenburg Research in August, which led to a 47% decline in its stock value last week. The latest news has only added to the uncertainty surrounding Super Micro’s future.
NVIDIA Remains Tight-Lipped
NVIDIA, meanwhile, is refusing to comment on Super Micro’s woes. When approached by Investing.com for a statement, an NVIDIA spokesperson declined to comment, fueling speculation about the company’s involvement in the AI supply chain.
Dell Technologies Seen as Beneficiary
Mizuho analyst Jordan Klein believes that Dell Technologies Inc (NYSE:DELL) could be a beneficiary of Super Micro’s struggles. In a note to clients, Klein predicted that Dell would soon announce an expansion of its order book due to demand driven by Super Micro’s overhang issues.
Leave a Reply