SMCI surges before market opening, is it an opportunity or risk?

Whether SMCI can avoid being delisted from NASDAQ again?

My basic view is that the worst moment has passed.

SMCI has now appointed BDO USA as its new auditor. The company has also submitted a plan to Nasdaq to file its annual report ending June 30 and its quarterly report ending September 30.

The common sense is BDO USA dared to take over the audit business from EY only after internal evaluation and voting. BDO should have fully understood the reasons why EY abandoned the audit, assessed the risks, had feasible plans, and also received commitments to the audit requirements put forward by the company's management.

In addition, if the claim that the FBI was investigating the illegal sale of goods is true, listed companies must announce major events in a timely manner. So far, there is no public information, and the truth is known.

What to expect now

Considering its earnings growth, SMCI currently trades at a reasonable P/E ratio of 10.4x. This valuation seems relatively attractive when compared to its industry peers and their growth rates.

SMCI has prepared its products and solutions to further expand the scale of its Blackwell servers.

The AI ​​server market will definitely not let Dell dominate alone, and Dell also cannot take so many orders. This is also the most basic game theory. So as long as SMCI does not delist, it can still return to 20PE

Analysts remain optimistic about SMCI's growth potential

Despite the company’s price target cuts following the auditing challenges, many analysts still predict that the company’s stock price will rise over the next 12 months.

On average, the price target is set at $40.32, which is more than 87% higher than the $33.15 currently.

However, sentiment is cautious, with 6 ratings of hold, while 3 ratings are buy and 2 ratings are sell.