Super Micro Stock Bucks Broader Tech Weakness Wednesday, Thanks to 2 Catalysts: Retail Positions For Short-Squeeze
By Stocktwits Inc | First Published Nov 28, 2024, 1:00 AM ISTAfter delisting fears abated, Super Micro shares have bounced back nicely from a bottom around $17.
Shares of artificial intelligence server manufacturer Super Micro, Inc. ($SMCI) continued their volatile run, and on Wednesday, the stock bucked the broader market downturn and traded firmly in positive territory.
As of 1:56 p.m. ET, Super Micro stock climbed 2.09% to $35.15, although on below-average volume, potentially due to typical thin pre-holiday trade. Incidentally, the Invesco QQQ Trust ($QQQ), an exchange-traded fund that tracks the Nasdaq 100 Index, was down about 0.80% due to a sell-off in the semiconductor space.
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After delisting fears abated, Super Micro shares were on the mend, moving from a bottom of $17.25 on Nov. 15 to as high as $39.23 this Monday.
On Wednesday, the stock may have received a shot in the arm from twin catalysts. Computer and peripherals manufacturer Dell Technologies, Inc.’s ($DELL) third-quarter results showed AI server sales was strong at $2.9 billion, with orders at a record of $3.6 billion.
This in turn is positive for Super Micro, which counts Nvidia Corp. ($NVDA) among its customers.
Also, in a 8-K filing with the SEC on Tuesday, Super Micro said it prepaid in full and closed out loans agreements with Cathay Bank and Bank of America on Nov.20. The filing, however, was scant in details and did not reveal the terms of the prepayment or the reasons thereof.
The development should allay investors’ concern about cash runway as the company slowly extricates itself from the accounting mess that followed the resignation by Ernst & Young as its auditor in October, citing concerns about governance, transparency and internal control over financial reporting.
Since then, the company has appointed a new auditor and also managed to avoid delisting from the Nasdaq exchange by submitting a compliance plan with regard to late-filing of its fiscal-year 2024 annual report and the quarterly report for the first quarter that ended in Sept. 2024.
Super Micro stock is up 21% for the year-to-date period.
On Stocktwits, retail sentiment remained ‘bullish’ (63/100), albeit message activity remained muted at ‘normal’ levels.
A user on the platform suggested follow-on buying materially as shorts are forced to cover. About 15% of the outstanding shares are held short, according to Yahoo Finance data.
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