Super Micro Computer, Inc. (SMCI) has seen a volatile year, with its stock price swinging between sharp losses and notable rebounds. The San Jose-based tech company, valued at $24.8 billion, is known for its modular server and storage systems that power AI, enterprise, and cloud infrastructure globally. Yet despite its growth story, SMCI stock is under pressure from both market dynamics and recent legal troubles.
SMCI Outperforming in 2025—But Not Without Risks
Year-to-date, SMCI has surged 41.5%, far outpacing the Nasdaq Composite Index’s 1.5% gain. Over the past three months alone, shares jumped 12.8%, beating the Nasdaq’s 7.7% return. The stock has been trading above its 50-day and 200-day moving averages since mid-May, signaling renewed investor confidence.
However, when viewed through a 12-month lens, the picture isn’t as rosy: SMCI shares have dropped 43.9% over the past year, underperforming the Nasdaq’s 14.4% rise during the same period. The stock is still down 57.5% from its 52-week high of $101.40 set in June 2024.
Legal Clouds Over SMCI
Adding to investor uncertainty, SMCI is facing a class-action lawsuit filed by shareholders. The legal action alleges the company overstated its sales figures, reappointed executives tied to past compliance issues, and continued shipments to regions under U.S. restrictions.
The lawsuit gained traction after SMCI disclosed on August 28, 2024, that it would delay filing its annual Form 10-K, citing the need to evaluate its internal financial reporting controls. That announcement caused the stock to plummet by 21% in a single day, highlighting how fragile investor trust can be when it comes to accounting transparency.
Earnings Snapshot and Outlook
Despite the controversy, Super Micro continues to post strong revenue growth. In its latest Q3 results, SMCI reported $4.6 billion in revenue, a 19.5% year-over-year increase. However, earnings per share fell 53%, dropping to $0.31 as the company battled rising costs and pricing pressure in a highly competitive market.
SMCI expects full-year revenue between $21.8 billion and $22.6 billion, a target that Wall Street is closely watching. Analysts maintain a “Moderate Buy” consensus rating on the stock, with an average price target of $45.13, suggesting limited upside from current levels.
Competitive Pressures and Market Challenges
SMCI operates in a fierce landscape dominated by rivals like Dell Technologies (DELL) and Hewlett Packard Enterprise (HPE). Dell, for instance, has been more resilient over the past year, logging a smaller decline of 12.1%. SMCI has also faced headwinds from tariffs, delayed customer purchasing decisions, and a one-time inventory write-down on older hardware.
Additionally, the company’s long-term margins are being squeezed as buyers wait for the next generation of AI-optimized platforms. These challenges, combined with legal scrutiny, create a complex outlook for investors.