Tuesday saw the disclosure of a short position in Super Micro Computer & purported “accounting manipulation” at the manufacturer of AI servers by Hindenburg Research, the latest move by the short seller whose claims have rocked a number of well-known businesses. In the study, the server market, one of the main beneficiaries of the generative AI boom, is pitted against the short seller, who has fought against billionaire investor Carl Icahn and India’s Gautam Adani.
Stock Has Almost Doubled In 2024
Super Micro’s stock fell 3.5% in early trading. After over tripling in value the previous year, the stock has almost doubled in 2024. Hindenburg cited a probe that comprised interviews with former top employees and litigation documents, saying it uncovered evidence of concealed related party transactions and failure to adhere to export regulations, among other concerns. “It (Super Micro) excelled as an early mover yet faces significant accounting, compliance, and governance issues & offers an inferior product & service now being washed away by stronger competition,” Hindenburg stated in the study.
Next Generation AI Chips
An inquiry for comment was not immediately answered by Super Micro. The assertions made in the report from Hindenburg could not be independently confirmed by Reuters. Super Micro, renowned for its liquid cooling expertise for high-power semiconductors, has been able to profit from the spike in demand for AI servers thanks to relationship with chip giant Nvidia. Despite a spike in revenue, recent pressure on margins has come from rivals like Dell and the increased cost of producing servers.
The company’s large expenditure on supporting the next generation of artificial intelligence chips, notably those marketed by Nvidia, has drawn criticism from analysts. In recent months, the company’s shares have also experienced pressure from growing concerns that Big Tech may reduce its expenditure on AI due to the technology’s sluggish payoffs, despite the company investing billions of dollars in it.
