MW Super Micro's stock extends historic surge, has more than doubled in 7 days
By Tomi Kilgore
After scoring a record rally last week, the server maker's stock was rallying toward a third straight double-digit percentage gain for the first time ever
There seems to be no stopping Super Micro Computer Inc.'s stock, which is tacking on another double-digit percentage gain on top of its recent record rally.
The server maker and artificial-intelligence play - which only recently turned into a delisting risk - has now seen its stock $(SMCI)$ more than double in the seven sessions since it closed at an 18-month low. It is still trading at less than one-third the price it reached at its record-high close about eight months ago.
What's fueling the stock's recent ride higher may be more about what hasn't happened, rather than what has.
Among the reasons for Super Micro's $100-plus selloff - from its closing peak of $118.81 on March 13, to the Nov. 14 low of $18.01 - were worries that the company's inability to file audited results on time, and news that its auditor had resigned, would lead to the stock being delisted from the Nasdaq COMP and potentially booted from the S&P 500 index SPX.
Read: Will Super Micro get booted from the S&P 500? That may come before a delisting.
The shares then took flight after company staved off delisting by filing its plan to regain listing compliance on deadline day, and named a new auditor. It got a further boost when S&P Dow Jones Indices made changes to the S&P 500 that didn't include removing Super Micro's stock.
Also read: Super Micro's stock had a historic week - but it's still 70% off its highs.
After soaring a weekly record of 78.4% last week, the stock was up around 11% in afternoon trading Monday, enough to pace the S&P 500's gainers. It has now charged more than 104% higher over the past seven trading days.
It was also headed for a third straight double-digit percentage gain - it rose 11.6% on Friday and 15.1% on Thursday - for the first time since the stock started trading in March 2007.
As Mizuho analyst Vijay Rakesh said in a recent note to clients, he believes Nasdaq's approval of Super Micro's plan to regain compliance is now on deck, with a decision likely to take two to five weeks. The filing deadline for the company's annual report is in February 2025.
In the meantime, Rakesh noted that Super Micro is still the technology leader in AI servers, even as the delay in filing its financials has had some impact on orders.
Despite the midyear selloff, the stock has still rallied more than 29.4% this year to date, while the Technology Select Sector SPDR ETF XLK has gained 21.2% and the S&P 500 has advanced 25.5%.
-Tomi Kilgore
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(END) Dow Jones Newswires
November 25, 2024 13:58 ET (18:58 GMT)
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