Super Micro Computer Inc's Stock Volatility

Investing.com — AI server maker Super Micro Computer Inc (NASDAQ:SMCI) experiences volatility as it grapples with auditor resignation news from last week.

Adding to today's fluctuations, an article suggests that NVIDIA Corporation (NASDAQ:NVDA) is restructuring Super Micro orders, altering the AI supply chain.

After an early drop of over 8% on Monday, the stock has bounced back to a 4% increase.

Supply Chain Impacts

According to DigiTimes Asia, sources indicate that Asian server ODMs Gigabyte and ASRock have benefitted from rerouted SMCI orders, landing contracts with major generative AI compute supplier Coreweave.

Auditor Resignation

Last week, Super Micro announced the resignation of Ernst & Young (EY) as its auditor, citing concerns over governance, transparency, and internal controls. EY raised questions regarding the company’s ethical standards, adherence to COSO Framework principles, and the presence of an independent oversight body. In its resignation, EY noted that it could no longer rely on management's representations or associate with the company's financial statements due to issues discovered recently.

The stock faced additional pressure after a Hindenburg Research short report in August, leading to a 47% plunge last week after the auditor news.

NVIDIA's Silence

NVIDIA has refrained from commenting on Super Micro’s challenges. An NVIDIA spokesperson declined to provide insights when contacted last week by Investing.com.

Analyst Insights

Mizuho analyst Jordan Klein has been advocating for Dell Technologies Inc (NYSE:DELL), suggesting it stands to gain from Super Micro's difficulties. He posited, “It may take some time, but my call is sooner than later, you start to hear from DELL management about demand and order book expansion related to SMCI overhang issues,” in a note to clients on Monday regarding his long-term outlook on Dell.