30 Best and Worst Data Center Stocks

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28. Super Micro Computer, Inc. (NASDAQ:SMCI)

Downside Potential: -4%

Number of hedge funds: 33

Super Micro Computer Inc. (NASDAQ:SMCI) designs, develops, and manufactures a comprehensive range of high-performance and high-efficiency servers, storage systems, and networking solutions. These products are extensively used in data centers, cloud computing, AI, 5G, IoT, and edge computing. Given the significant electricity consumption typically associated with high-performance computing, Supermicro’s liquid cooling solutions can reduce operating expenses by up to 40% and enable data centers to operate more efficiently with lower Power Usage Effectiveness (PUE), the ratio of power used by the facility to power used by IT equipment.

Super Micro Computer Inc. (NASDAQ:SMCI) remains a key player in the data center industry. However, its growth narrative encountered an unusual adversary in late August 2024, when short-seller Hindenburg Research accused the company of financial and accounting irregularities. The report also labeled the company a “serial recidivist” citing its temporary delisting in 2018 due to ‘widespread accounting violations’ charges by the SEC, although it later resumed business through an SEC settlement.

In a serious turn of events, Super Micro Computer Inc. (NASDAQ:SMCI) failed to file its 10-K with the SEC in August 2024, and its auditor resigned in late October 2024. The company now faces the risk of being delisted from Nasdaq and has a deadline of February 25, 2025, to file to avoid this. Although Hindenburg Research is now disbanded, the company has some ground to cover to regain investor trust and support its valuation.

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