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Luke Kawa

Super Micro falls after warning it still hasn’t fixed its accounting problems

Super Micro’s accounting issues aren’t fully behind it.

“We have identified material weaknesses in our internal control over financial reporting, which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner,” its 10-K filing said, released after the close on Thursday.

“We expect to continue to face many of the risks and challenges related to previously being delinquent in our SEC reporting obligations,” management added. “We may fail to remediate material weaknesses in our internal control over financial reporting and other material weaknesses may be identified in the future, which could adversely affect the accuracy and timing of our financial reporting.”

Super Micro Computer noted that its failure to deliver financials on time has put downward pressure on its share price in the past. The stock is down just over 3% in Friday morning trading.

Shares of the AI server company cratered last year and early into 2025 amid concerns over how it compiles its financials. The inability to deliver filings in a timely fashion nearly saw the stock delisted from the Nasdaq.

Late last August, Super Micro announced that it was delaying the filing of its annual report while it assessed internal controls over its accounting. That news came one day after short seller Hindenberg Research had published a report alleging accounting irregularities at the company. At the end of October, Ernst & Young resigned as its auditor, saying it had questions “about whether the Company demonstrates a commitment to integrity and ethical values consistent with” best business practices around internal controls.

Super Micro ultimately announced BDO USA as its new auditor, said that an internal review found no management misconduct, and was able to file its annual report at the last minute in February in order to stay listed on the Nasdaq.

We’ve discussed in the past that Super Micro is a rare breed in today’s market: a company that is tethered to the AI theme, but screens as (relatively) cheap.

It trades at an enterprise value to expected 12-month sales ratio of less than 0.8x, compared to 5.4x for the S&P 500 technology hardware and equipment industry group and 3.4x for the S&P 500 as a whole.

At this point, it’s tough to say that low multiple isn’t a direct result of the accounting cloud that continues to hang over the company and management’s persistent inability to date to deliver on the sales growth it’s been targeting.

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SpaceX received more than a dozen positive analyst calls on Tuesday — including from major Wall Street banks — as they initiate coverage on Elon Musk’s space and AI company.

SpaceX went public on June 12 at a $2.2 trillion valuation, the largest debut in history. While the company hasn’t yet posted a profit, it seems to have convinced Wall Street that it will get there and grow its valuation on the way.

Of the at least 17 analysts that gave a rating on Tuesday, all but one gave it a “buy” or “outperform” rating. MoffettNathanson was "neutral."

The ratings come as SpaceX joined the Nasdaq 100 index, a benchmark tech-heavy basket of companies that underpins millions of portfolios. The inclusion adds built-in demand for the stock from index funds and ETFs.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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