- Summary:
- With an accounting scandal and talk of PIPE deal hanging over its head, is there a way back up for SMCI stock price?
Super Micro Computer Inc. (SMCI) stock price edged up in the last trading session of 2024 as it gained 1.3% in the pre-market to trade at $31.09. The company has been sending mixed signals since November, but its standing is still shaky. Nonetheless, SMCI is likely to end the year on a positive return, with its YTD gains at +9.5% on the last day of the year.
Why SMCI stock price faces extended downside
A major cloud still hangs over SMCI, with the overall positive ending covering for the ills that have plagued the company since the Hindenburg Report. The investment research company alleged in late August that SMCI was involved in accounting manipulation, export control failures and undisclosed third-party transactions.
Super Micro denied the Hindenburg Report findings, giving some investors a ray of hope. However, recent allegations of a Private Investment in Public Equity (PIPE) deal, which essentially means selling stakes at discounted prices, signals deeper trouble.
The stock hit record highs of $122 in March, meaning that it has lost 75% of its value since then. The gains by SMCI stock price in November have helped it limp into 2025 with some semblance of a company that could recover. However, confirmation of PIPE would probably send it into a freefall.
On a positive note, Super Micro Computer Inc (NASDAQ: SMCI) has built a strong reputation in OEM server equipment and server management software has helped it build a resilient image. Its enviable client list, which includes Nvidia, AMD, Alibaba, Intel, IBM, and Amazon Web Services, has come in handy. Therefore, SMCI’s stock price trajectory in the coming weeks will depend on its ability to stay away from the PIPE deal and retain its clientele.
Super Micro Computer stock price prediction
Pivot: Super Micro Computer stock price pivots at $31.50, and the momentum calls for further downside if resistance stays above that level.
Support: The first support is likely to be at $30.40. A stronger downward momentum could test $29.60
Resistance: The first hurdle is likely to be at $32.50. Breaking above that level will invalidate the downside thesis. Clearing that barrier could send the stock higher and test $33.50.
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