SMCI Stock Investors Are Walking a Thin Line

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Key Points:

• Super Micro Computer, related to NVIDIA, faces SEC and DOJ probes over accounting concerns.
• Booming sales continue, but Hindenburg escalate warnings about financial practices.
• Stock may charm day traders due to high AI sector interest and legal risks.
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https://videos.247wallst.com/247wallst.com/2024/10/SMCI-Stock-Investors-Are-Walking-A-Thin-Line.mp4

Doug Mcintyre: [00:00:00] Super micro computer, uh, you know, uh, it's a chip company and apparently quite a good one and server company. I mean, people have fallen in love with it because it's one of these high end chip companies that lives in the halo of, uh, of NVIDIA. So two things has happened to them. The first one is, is that They may have sort of fudged some of their numbers according to, you know, an sec, look at this.

I mean, I'd be worried because no matter how good your company is and no matter how great your products, once the sec starts sniffing around, almost never, Never works out well, but they did have good numbers, right?

Lee Jackson: Yeah, they had some solid numbers, which, which kind of took the edge off of the slide after the report, the justice department was looking at them.

I think, you know, that probably helped stem some of the short selling, but again, it's had a huge run, big stock [00:01:00] split. And again, I think their servers, which use NVIDIA chips are, are the sales as we saw were good, but again. When Hindenburg, I mean, I've been in this business a long time, you know, and there's always been the kind of short sellers that came and went because.

They'd either make a bad call or, or somebody like Ackman would spin 'em on their head. But Berg's good and, and people that have seen some of their work in the past, when they go in there, they're usually pretty spot on. 'cause you know, they're always committing their own trade as well. Yeah, sure. And um, they were just like, yeah, some of the accounting looks really, really shifty and, um, it's gonna be interesting to see how this plays out because.

Like you said, Doug, when Justice Department gets ahold of you and they think there's something that's worthwhile, they don't have anything better to do, so they'll, they'll stick with it until they can be proven wrong three or four times. I, [00:02:00] I mean, if you're a

Doug Mcintyre: traitor, uh, this is a good opportunity to ask the question of.

Balancing what could be very good results in a hot sector against a government investigation. Now, you'd have to be an intrepid trader, but that doesn't mean you can't do it. You're walking a very thin line. You're betting that the government, uh, you know, sort of says, well, you know, it's not that bad.

We're going to find you a dollar and The business continues to do well, or the government comes in and says, you know, there's fraud here. And suddenly the stock takes a nosedive. So this was the kind of stock, if. If i'm looking at it i'm looking at it really is almost a day trader.

Lee Jackson: Yeah, and again the the ai Momentum is just absolutely, you know Almost unstoppable but at one point as we've discussed in the past, you know It's going to [00:03:00] hit a wall because there's just going to be a point where the kind of credible sales That nvidia super micro and other companies have had You know, they're going to, they're going to hit a wall and they're going to hit comps that they just can't stand up to.

And when that starts to happen in a, Hey, it could be a year from now, two years from now, you know, NVIDIA is saying, Oh, the Blackwell is, is going great. And now the orders are staggering and this and that, and it's like, well, okay. But at one point, everything's going to slow down and it'll be interesting to see how super microcomputer falls into that play.

Doug Mcintyre: Yeah.

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