This Stock-Split Stock Just Ran Into Trouble. Here's Why It's Still a Buy.
Super Micro Computer (NASDAQ: SMCI) posted a fantastic first half of the year. Thanks to demand from artificial intelligence (AI) customers, in just one quarter, the company delivered sales that surpassed what it used to generate in a full year as recently as 2021. The S 500 and Nasdaq-100 even welcomed this 30-year-old tech company to join. And Supermicro's share price reflected all this good news, climbing 188% to outperform market darling Nvidia.
In fact, the stock had reached such high levels -- peaking at more than $1,100 early in the year -- that in August, the company announced a stock split planned for later this month. This sort of operation involves the issuance of additional shares to current holders to bring down the per-share price, opening up the investment opportunity to a broader range of investors.
But in recent weeks, the story has lost some of its sparkle. A short report by Hindenburg Research alleging troubles at Supermicro hit the stock badly -- it's dropped 16% since the report's late-August release. Separately, Supermicro delayed filing its 10-K annual report, another element that's weighed on the shares. Despite these challenges, Supermicro still makes a great buy right now. Let's find out why.
Source Fool.com
