Jim Cramer on Super Micro Computer and Other Stocks

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

Number of Hedge Fund Holders: 47

Super Micro Computer, Inc. (NASDAQ:SMCI) specializes in the development and manufacturing of high-performance server and storage solutions. The company offers various products, including complete server systems, modular blade servers, workstations, networking devices, and various server subsystems. Cramer has made note of the stock being down the past few weeks. Here’s what the Mad Money host had to say:

“It’s too hard. Just go Buy Nvidia. SMCI was down terrible, terrible last few weeks, but I really want you to be in Nvidia, not SMCI.”

While Super Micro Computer (NASDAQ:SMCI) stock went up earlier this year, it was subsequently followed by a significant decline after Hindenburg Research, a short-seller, published a report raising serious concerns. The report alleged accounting irregularities, undisclosed related-party transactions, sanctions violations, and issues with customers. The company responded to these claims, labeling them as “false or inaccurate.”

However, the situation worsened when the company announced a delay in filing its 10-K annual report for the fiscal year ending June 30, which further impacted investor confidence and led to a decline in share prices. Adding to the challenges, recent reports indicate that the U.S. Department of Justice has initiated an investigation into the company. This development raises additional concerns for stakeholders.

On October 9, Barclays maintained an Equal Weight rating and $42 price target on Super Micro Computer (NASDAQ:SMCI). Additionally, the firm revised its fiscal year 2025 earnings per share estimate down to $3.09 from $3.50. The analyst noted that the company is moving towards the midpoint of its guidance, but is experiencing softer gross margins due to an adverse mix shift. Uncertainties surrounding internal controls and the ongoing delay in the 10-K filing are contributing to a cautious outlook, making it difficult to predict a clear resolution for the company.