Super Micro’s cautionary tale: From S&P inclusion to losing $54B in market cap

On the first day of March this year, S&P Dow Jones Indices said it was adding information technology hardware manufacturer Super Micro Computer (NASDAQ:SMCI) to Wall Street’s benchmark list of S&P 500 companies, a seemingly triumphant culmination to an incredible journey that swelled the stock more than 2000% in two years.

Shortly after that announcement, on March 13, SMCI stock closed at $118.81/share, marking a whopping 317.9% YTD advance at that time. Its market cap that day was nearly $70B.

In retrospect, few perhaps could have imagined that that would be the end of the epic ride.

Today, Super Micro Computer (SMCI) stock sits at $26.05/share, a 78.1% slump from that record close notched on March 13. The San Jose, Calif.-based firm now has a market cap of just over $15B.

SMCI was founded in 1993, and its product portfolio over the years has comprised of rackmount servers and graphics processing unit (GPU) servers, motherboards and chassis, and ethernet switches and adapters. Outside the chip industry, the firm was little known.

But all of that changed in 2022, with the release of OpenAI’s ChatGPT and the start of the artificial intelligence (AI) revolution. The demand for processors that powered AI technology exploded, and Nvidia (NVDA) became a huge beneficiary of that by becoming the supply leader in such chips.

Super Micro Computer (SMCI) rode that Nvidia (NVDA) boom through its partnership with the Jensen Huang-led company, under which it creates servers that house Nvidia (NVDA) chips.

Subsequently, SMCI began to see massive revenue growth. The company in its last three quarters has reported at the very least a 100% Y/Y surge in sales, and its full fiscal year 2024 revenue more than doubled to $14.94B.

But Wall Street has soured on SMCI, largely due to specific triggers since the company’s inclusion in the S&P. The deterioration in sentiment has reached a point where the firm is now in danger of being delisted from the Nasdaq.

Since the March 13 record close, Super Micro (SMCI) stock has seen eight days in which it has fallen more than 10%, including the last three sessions in a row. Of those eight red days, here were the notable ones:

• April 19 – SMCI crashed 23.1%. The company did not provide any preliminary figures along with its FQ3 2024 earnings release announcement like it usually did.
• August 7 – SMCI plummeted 20.1%. The sell-off came after the company’s FQ4 2024 results.
• August 28 – SMCI cratered 19%. The company said it was delaying its annual filing for fiscal year 2024. The day before, Hindenburg Research had published a short report on SMCI.
• September 26 – SMCI shed 12.2%. The Wall Street Journal reported that the U.S. Department of Justice was probing SMCI.
• October 30 to November 1 – SMCI fell 47% over these three days, triggered by the resignation of its auditor Ernst & Young LLP.

Super Micro Computer (SMCI) has not filed official financial disclosures with the U.S. Securities and Exchange Commission since May. The company has scheduled a conference call and webcast for a FQ1 2025 business update on November 5.

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• Super Micro extends deadline to deliver annual results to Dec. 31
• Nvidia remains AI king as Super Micro tagged along for wild ride