1. Technology

SMCI Stock Jumps 15%. What’s Behind Super Micro’s Latest Surge.

By Mackenzie Tatananni

Updated May 14, 2025, 10:57 am EDT / Original May 14, 2025, 8:31 am EDT

Shares of Super Micro Computer SMCI +15.60%  extended gains on Wednesday following a flood of good news.

The stock surged 15% to $44.57, putting it on pace for its highest close since Feb. 26, according to Dow Jones Market Data. The S&P 500  SPX +0.07%  and Nasdaq  Composite COMP  +0.71%  were up 0.1% and 0.4%, respectively.

Super Micro’s steep ascent began Tuesday after Raymond James analysts initiated coverage at Outperform with a $41 price target. The firm dubbed the server maker “a market leader in AI-optimized infrastructure” and lauded its ability to offer “competitive pricing” relative to peers.

Also on Tuesday, Super Micro said it had shipped a number of high-density servers powered by Advanced Micro Devices’ 

AMD

+4.70%

 EPYC 4005 series processors, and separately announced a $20 billion deal with Saudi Arabian data center company DataVolt.

The multi-year partnership is meant to accelerate the delivery of GPU platforms and rack systems for DataVolt’s hyperscale campuses, the companies said.

Shares received an additional boost along with the broader market after the U.S. and China agreed to temporarily lower tariffs. Super Micro ended Tuesday’s session up 16% at $38.89.

Regardless of the sharp gains, the stock remains down 53% from its 52-week high and off 62% from its record closing high of $118.81, which it notched in March 2024.

Shares peaked at the end of February after the server maker narrowly avoided delisting from the Nasdaq by filing a string of delayed financial reports with the U.S. Securities and Exchange Commission.

Despite the company’s proclamation that the matter was “closed,” auditor BDO expressed an adverse opinion, stating that Super Micro “did not maintain, in all material respects, effective internal control over financial reporting as of June 30, 2024.”

An adverse opinion indicates that a company’s financial statements are misrepresented or inaccurate. While months have passed since the debacle, Raymond James analysts argued that the company’s “reputational risk” was dampening its valuation.

The sudden increase in Super Micro’s price, amounting to a 39% gain over the past three days, raises questions as to whether the stock is caught in a short squeeze.

A short squeeze occurs when the price of a stock rises unexpectedly instead of falling, forcing short-sellers to buy back shares to diminish their losses. This collective buying can drive up a stock’s price even further.

As of May 2, 108.28 million shares were sold short, representing 21% of Super Micro’s float. As a general rule of thumb, short interest between 10% and 20% is considered high, while any value exceeding 20% is extremely high.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com