Super Micro Was the Most-Shorted S&P 500 Stock in April. Why Shares Are Falling.
Updated May 15, 2025, 10:01 am EDT / Original May 15, 2025, 5:42 am EDT
Shares of Super Micro Computer
SMCI
-1.96%
have been on the rise as of late, boosted by a stream of good news. However, the rally appeared to be losing steam on Thursday.Through the end of April, Super Micro was the most-shorted stock in the S&P 500
SPX
+0.32%
as a percentage of its float, according to Dow Jones Market Data. With 21.3% of its shares sold short, Super Micro came in above Moderna at 17.6%.A look at historical data stretching back to 2010 reveals the stock was at its most-shorted in nearly a decade. Its sudden ascent since the beginning of the month has raised questions as to whether Super Micro 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.
If this was the case, the squeeze appeared to be losing ground on Thursday as shares, trading under the ticker SMCI, slipped 3% to $43.65. The S&P 500 and Nasdaq Composite were down 0.3% and 0.7%, respectively.
The server maker logged its highest close since February at the end of Wednesday’s session, rising 16% to $45. This could be another driver behind the decline, as stocks commonly fall in the wake of big gains.
A wave of positive headlines earlier this week was also giving shares a boost. In addition to the cooling of trade tensions between the U.S. and China, SMCI received a lift after the company struck a $20 billion data-center deal with Saudi Arabia’s DataVolt and began shipping “a number of” high-powered servers.
Raymond James initiated coverage at Outperform on Tuesday. Analysts led by Simon Leopold dubbed Super Micro a market leader in artificial-intelligence infrastructure, with competitive pricing relative to peers.
Following the announcement of Super Micro’s partnership with DataVolt, Raymond James reiterated the rating and said the deal expanded visibility on Super Micro’s future shipments and related results.
Some 47% of analysts currently covering the stock now rate SMCI at Buy or the equivalent, while only 13% have a Sell-equivalent rating on the shares, according to FactSet. That’s an improvement from six months ago when only 25% rated the stock a Buy, while 25% recommended clients to Sell.
While Super Micro has reaped the benefits of the AI server boom and established itself as a key player in hyperscale deployments, shares have come under pressure in the past year.
Many analysts grew cautious amid an investigation by the Justice Department, questions about its accounting practices, and underwhelming quarterly results.
Shares peaked at the end of February after the server maker narrowly avoided delisting from the Nasdaq by filing delayed financial reports with the U.S. Securities and Exchange Commission.
“While not tied to fraud, the delay raised investor concerns and regulatory attention,” Raymond James noted Tuesday. While the company later resumed filings, “the event briefly affected its stock performance and transparency reputation.”
Super Micro said an independent investigation found no evidence of fraud or misconduct. However, auditor BDO USA
expressed an “adverse opinion” that indicated the company’s internal control system wasn’t catching and preventing material errors in financial statements.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com and Elsa Ohlen at elsa.ohlen@barrons.com
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