Charles Liang, CEO of Super Micro Computer, during the AMD Advancing AI event in San Jose, California, on Dec. 6, 2023.
David Paul Morris | Bloomberg | Getty Images
In March, Super Micro Computer was added to the S&P 500 after an epic run that lifted the stock by more than 2,000% in two years, dwarfing even Nvidia’s gains.
As it turned out, S&P was calling the top.
Less than two weeks after the index changes were announced, Super Micro reached its closing high of $118.81 and had a market cap of almost $70 billion. The stock is down 72% since then, pushing the valuation to under $20 billion, the first major sign in the public markets that the hype around artificial intelligence may not all be justified.
Super Micro is one of the primary vendors for building out Nvidia-based clusters of servers for training and deploying AI models.
The stock plunged 33% on Wednesday, after the company disclosed that its auditor, Ernst & Young, had resigned, saying it was “unwilling to be associated with the financial statements prepared by management.” Super Micro is now at risk of being delisted from the Nasdaq, and has until Nov. 16 to regain compliance with the stock exchange.
“We see higher delisting risk in the absence of an auditor and the potential challenge to getting a new one,” analysts at Mizuho, who have the equivalent of a hold rating on the stock, wrote in a report on Wednesday.
Ernst & Young was new to the job, having just replaced Deloitte & Touche as Super Micro’s accounting firm in March 2023.
A Super Micro spokesperson told CNBC in a statement that the company “disagrees with E&Y’s decision to resign, and we are working diligently to select new auditors.”
Representatives for Ernst & Young and Deloitte didn’t respond to requests for comment.
Super Micro vs. Nvidia
For much of Super Micro’s three decades in business, the company existed well below the radar, plodding along as a relatively obscure Silicon Valley data center company.
That all changed in late 2022 after OpenAI’s launch of ChatGPT set off a historic wave of investment in AI processors, largely supplied by Nvidia. Along with Dell, Super Micro has been among the big tangential winners in the Nvidia boom, packaging up the powerful graphics processing units (GPUs) inside customized servers.
Super Micro’s revenue has at least doubled in each of the prior three quarters, though the company hasn’t filed official financial disclosures with the SEC since May.
Wall Street’s mood on the company has shifted dramatically.
Since the S&P’s announced index changes in March, Super Micro’s stock has dropped at least 10% on six separate occasions. The most concerning slide, prior to Wednesday, came on Aug. 28, when the shares sank 19% after Super Micro said it wouldn’t file its annual report with the SEC on time.
“Additional time is needed for SMCI’s management to complete its assessment of the design and operating effectiveness of its internal controls over financial reporting as of June 30, 2024,” the company said.
Noted short seller Hindenburg Research then disclosed a short position in the company, and said in a report that it identified “fresh evidence of accounting manipulation.”
‘Clock ticking’
The following month, Super Micro said it had received a notification from Nasdaq, indicating that the delay in the filing of its annual report meant the company wasn’t in compliance with the exchange’s listing rules. Super Micro said Nasdaq’s rules allowed the company 60 days to file its report or submit a plan to regain compliance. Based on that timeframe, the deadline would be mid-November.
It wouldn’t be the first for Super Micro. The company was previously delisted by the Nasdaq in 2018.
Wedbush analysts see reason for worry.
“With SMCI having missed the deadline to file its 10K and the clock ticking for SMCI to remedy this issue, we see this development as a significant hurdle standing in the way of SMCI’s path to filing in time to avoid delisting,” the analysts, who recommend holding the stock, wrote in a report.
As Super Micro’s stock was in the midst of its steepest selloff since 2018 on Wednesday, the company put out a press release announcing that it would “provide a first quarter fiscal 2025 business update” on Tuesday, Nov. 5.
That’s Election Day in the U.S.
Super Micro’s spokesperson told CNBC that the company doesn’t expect matters raised by Ernst & Young to “result in any restatements of its quarterly financial results for the fiscal year ended June 30, 2004, or for prior fiscal years.”
Beyond Super Micro, the evolving incident is a potential black eye for S&P Dow Jones. Since Super Micro replaced Whirlpool in the S&P 500, shares of the home appliance company are down about 3%, underperforming the broader market but holding up much better than the stock that took its place.
Inclusion in the S&P 500 often causes a stock to rise, because money managers tracking the index have to buy shares to reflect the changes. That means pension and retirement funds have more exposure to the index’s members. Super Micro shot up 19% on March 4, the first trading day after the announcement.
A spokesperson for S&P Global said the company doesn’t comment on individual constituents or index changes, and pointed to its methodology document for general rules. The primary requirements for inclusion are positive GAAP earnings over the four latest quarters and a market cap of at least $18 billion.
S&P is able to make unscheduled changes to its indexes at any time “in response to corporate actions and market developments.”
Kevin Barry, chief investment officer at Cantata Wealth, says greater consideration should be given to a stock’s volatility when additions are made to such a heavily tracked index, especially given that tech already accounts for about 30% of its weighting.
“The chances of a stock going up 10 or 20 times in a year or two and then having an indigestion moment is extremely high,” said Barry, who co-founded Cantata this year. “You’re moving out of a low volatility stock into a higher volatility stock, when tech already represents the largest sector by far in the index.”
— CNBC’s Rohan Goswami and Kif Leswing contributed to this report
CEO of Supermicro Charles Liang speaks during the Reuters NEXT conference in New York City, U.S., December 10, 2024.
Mike Segar | Reuters
PARIS — Super Micro plans to increase its investment in Europe, including ramping up manufacturing of its AI servers in the region, CEO Charles Liang told CNBC in an interview that aired on Wednesday.
The company sells servers which are packed with Nvidia chips and are key for training and implementing huge AI models. It has manufacturing facilities in the Netherlands, but could expand to other places.
“But because the demand in Europe is growing very fast, so I already decided, indeed, [there’s] already a plan to invest more in Europe, including manufacturing,” Liang told CNBC at the Raise Summit in Paris, France.
“The demand is global, and the demand will continue to improve in [the] next many years,” Liang added.
Liang’s comments come less than a month after Nvidia CEO Jensen Huang visited various parts of Europe, signing infrastructure deals and urging the region to ramp up its computing capacity.
Growth to be ‘strong’
Super Micro rode the growth wave after OpenAI’s ChatGPT boom boosted demand for Nvidia’s chips, which underpin big AI models. The server maker’s stock hit a record high in March 2024. However, the stock is around 60% off that all-time high over concerns about its accounting and financial reporting. But the company in February filed its delayed financial report for its 2024 fiscal year, assuaging those fears.
In May, the company reported weaker-than-expected guidance for the current quarter, raising concerns about demand for its product.
However, Liang dismissed those fears. “Our growth rate continues to be strong, because we continue to grow our fundamental technology, and we [are] also expanding our business scope,” Liang said.
“So the room … to grow will be still very tremendous, very big.”
Jeff Williams, chief operating officer of Apple Inc., during the Apple Worldwide Developers Conference (WWDC) at Apple Park campus in Cupertino, California, US, on Monday, June 9, 2025.
David Paul Morris | Bloomberg | Getty Images
Apple said on Tuesday that Chief Operating Officer Jeff Williams, a 27-year company veteran, will be retiring later this year.
Current operations leader Sabih Khan will take over much of the COO role later this month, Apple said in a press release. For his remaining time with the comapny, Williams will continue to head up Apple’s design team, Apple Watch, and health initiatives, reporting to CEO Tim Cook.
Williams becomes the latestlongtime Apple executive to step down as key employees, who were active in the company’s hyper-growth years, reach retirement age. Williams, 62, previously headed Apple’s formidable operations division, which is in charge of manufacturing millions of complicated devices like iPhones, while keeping costs down.
He also led important teams inside Apple, including the company’s fabled industrial design team, after longtime leader Jony Ive retired in 2019. When Williams retires, Apple’s design team will report to CEO Tim Cook, Apple said.
“He’s helped to create one of the most respected global supply chains in the world; launched Apple Watch and overseen its development; architected Apple’s health strategy; and led our world class team of designers with great wisdom, heart, and dedication,” Cook said in the statement.
Williams said he plans to spend more time with friends and family.
“June marked my 27th anniversary with Apple, and my 40th in the industry,” Williams said in the release.
Williams is leaving Apple at a time when its famous supply chain is under significant pressure, as the U.S. imposes tariffs on many of the countries where Apple sources its devices, and White House officials publicly pressure Apple to move more production to the U.S.
Khan was added to Apple’s executive team in 2019, taking an executive vice president title. Apple said on Tuesday that he will lead supply chain, product quality, planning, procurement, and fulfillment at Apple.
The operations leader joined Apple’s procurement group in 1995, and before that worked as an engineer and technical leader at GE Plastics. He has a bachelor’s degree from Tufts University and a master’s degree in mechanical engineering from Rensselaer Polytechnic Institute in upstate New York.
Khan has worked closely with Cook. Once, during a meeting when Cook said that a manufacturing problem was “really bad,” Khan stood up and drove to the airport, and immediately booked a flight to China to fix it, according to an anecdote published in Fortune.
Elon Musk, chief executive officer of SpaceX and Tesla, attends the Viva Technology conference at the Porte de Versailles exhibition center in Paris, June 16, 2023.
Gonzalo Fuentes | Reuters
Tesla CEO Elon Musk told Wedbush Securities’ Dan Ives to “Shut up” on Tuesday after the analyst offered three recommendations to the electric vehicle company’s board in a post on X.
Ives has been one of the most bullish Tesla observers on Wall Street. With a $500 price target on the stock, he has the highest projection of any analyst tracked by FactSet.
But on Tuesday, Ives took to X with critical remarks about Musk’s political activity after the world’s richest person said over the weekend that he was creating a new political party called the America Party to challenge Republican candidates who voted for the spending bill that was backed by President Donald Trump.
Ives’ post followed a nearly 7% slide in Tesla’s stock Monday, which wiped out $68 billion in market cap. Ives called for Tesla’s board to create a new pay package for Musk that would get him 25% voting control and clear a path to merge with xAI, establish “guardrails” for how much time Musk has to spend at Tesla, and provide “oversight on political endeavors.”
Ives published a lengthier note with other analysts from his firm headlined, “The Tesla board MUST Act and Create Ground Rules For Musk; Soap Opera Must End.” The analysts said that Musk’s launching of a new political party created a “tipping point in the Tesla story,” necessitating action by the company’s board to rein in the CEO.
Still, Wedbush maintained its price target and its buy recommendation on the stock.
“Shut up, Dan,” Musk wrote in response on X, even though the first suggestion would hand the CEO the voting control he has long sought at Tesla.
In an email to CNBC, Ives wrote, “Elon has his opinion and I get it, but we stand by what the right course of action is for the Board.”
Musk’s historic 2018 CEO pay package, which had been worth around $56 billion and has since gone up in value, was voided last year by the Delaware Court of Chancery. Judge Kathaleen McCormick ruled that Tesla’s board members had lacked independence from Musk and failed to properly negotiate at arm’s length with the CEO.
Tesla has appealed that case to the Delaware state Supreme Court and is trying to determine what Musk’s next pay package should entail.
Ives isn’t the only Tesla bull to criticize Musk’s continued political activism.
Analysts at William Blair downgraded the stock to the equivalent of a hold from a buy on Monday, because of Musk’s political plans and rhetoric as well as the negative impacts that the spending bill passed by Congress could have on Tesla’s margins and EV sales.
“We expect that investors are growing tired of the distraction at a point when the business needs Musk’s attention the most and only see downside from his dip back into politics,” the analysts wrote. “We would prefer this effort to be channeled towards the robotaxi rollout at this critical juncture.”
Trump supporter James Fishback, CEO of hedge fund Azoria Partners, said Saturday that his firm postponed the listing of an exchange-traded fund, the Azoria Tesla Convexity ETF, that would invest in the EV company’s shares and options. He began his post on X saying, “Elon has gone too far.”
“I encourage the Board to meet immediately and ask Elon to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO,” Fishback wrote.
Musk said Saturday that he has formed the America Party, which he claimed will give Americans “back your freedom.” He hasn’t shared formal details, including where the party may be registered, how much funding he will provide for it and which candidates he will back.
Tesla’s stock is now down about 25% this year, badly underperforming U.S. indexes and by far the worst performance among tech’s megacaps.
Musk spent much of the first half of the year working with the Trump administration and leading an effort to massively downsize the federal government. His official work with the administration wrapped up at the end of May, and his exit preceded a public spat between Musk and Trump over the spending bill and other matters.
Musk, Tesla’s board chair Robyn Denholm and investor relations representative Travis Axelrod didn’t immediately respond to requests for comment.