SMCI Stock Falls Nearly 4% In Tuesday Pre-Market As Investors Await An Update On Delayed Filing SMCI Shares Decline 3.8% In Pre-Market Trading On Wednesday As Investors Await An Update On Delayed Filing - Super Micro Computer (NASDAQ:SMCI), Hewlett Packard (NYSE:HPE)

Super Micro Computer Inc. SMCI is trading 3.8% lower in pre-market on Tuesday ahead of its second-quarter earnings call scheduled today after the market close.

What Happened: The company’s management is likely to provide updates on the delayed filing of its annual report for the fiscal year ending June 30, 2024, during the earnings call today. The shares of SMCI surged 17.5% on Monday, a day before its earnings release.

The Nasdaq Exchange has permitted SMCI to submit its 10-K filing until Feb. 25. The San Jose, California-based artificial intelligence company risks delisting if it misses the deadline.

In July, Ernst & Young (EY), then serving as Super Micro’s auditor, expressed concerns about the company’s governance and internal controls over financial reporting, prompting the board to establish a special committee. In December, Super Micro issued a statement regarding the special committee being unable to discover material facts backing EY’s statements, adding that there were no significant concerns regarding the integrity of Super Micro’s management. Previously, SMCI CEO Charles Liang expressed confidence that the technology company’s stock will not be delisted from the Nasdaq.

Why It Matters: Wall Street is keenly observing SMCI’s ongoing accounting issues. Investors are also eager for communication from the company regarding improvements to its financial controls and transparency. This is crucial to reassure shareholders about its governance practices, especially in light of the potential delisting risk.

In a note, Wedbush analyst, Matt Bryson, stated that they believe Supermicro may successfully restate its financials or could also seek a 180-day extension. However, they expressed uncertainty about Super Micro Computer’s near-term performance, pointing out that competitors such as HP Enterprise HPE have secured contracts in the artificial intelligence server market.

Bryson has expressed reservations about the company’s current stock price, citing “substantial unknowns” that could negatively impact the share price in the future.

However, Loop Capital Markets analyst Ananda Baruah is upbeat on SMCI and considers it an "important company in an important space" poised to benefit from growth factors like overcoming SEC filing delays and maintaining strong fundamentals.

SMCI stock has plunged more than 44% over the past year.