Artificial intelligence (AI) continues to grip investors, with many seeking exposure following favorable commentary in quarterly releases that support a visibly bright outlook.
A widely popular stock caught in the middle of the AI frenzy, Super Micro Computer SMCI, has seen its shares melt higher over the last month.
What’s been driving shares higher? Let’s take a closer look at how the company presently stacks up.
Super Micro Clears Fraud Allegations
Super Micro Computer is a total IT solution Provider for AI, Cloud, Storage, and 5G/Edge services, fully explaining the buzz around the stock. The company’s reported sales have shot higher, penciling in triple-digit percentage year-over-year growth rates in each of its last three quarters.
Image Source: Zacks Investment Research
But SMCI shares faced extreme pressure back in August following a short report from Hindenburg Research accusing the company of accounting manipulation. It delayed the filing of its 10-K annual report following the short report and saw its auditor resign, bringing about further scrutiny.
However, SMCI recently announced that an Independent Special Committee found no evidence of misconduct on the part of management or the Board of Directors, which perked shares up in a big way, which have nearly doubled (+94%) over the last month.
Image Source: Zacks Investment Research
‘The Special Committee’s rigorous investigation took over three months, with independent counsel devoting over 9,000 hours and the Secretariat forensic accounting team over 2,500 hours for the Review,’ said SMCI in a press release.
The investigation’s results reflect an interesting turnaround for the development overall, especially considering that SMCI shares saw a roughly 85% decline from all-time highs made in Q1 of 2024.
Bottom Line
The artificial intelligence theme isn’t going anywhere anytime soon, with investors continuing to clamor for exposure following robust quarterly results.
But a big player in the space – Super Micro Computer SMCI – became the target of short-sellers back in August, facing accusations of fraud.
But as discussed above, the company has cleared the accusations according to an Independent Special Committee, which found no evidence of misconduct on the part of management or the Board of Directors.
The positive development has led to the resurgence of SMCI shares over the last month, but they still remain well below all-time highs reached in the early months of 2024.
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