Super Micro shares dip after AI server maker flags financial control concerns

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(Reuters) -Super Micro Computer’s shares fell nearly 5% on Friday after the artificial intelligence-optimized server maker reiterated weaknesses in internal control over financial reporting.

The company disclosed in a regulatory filing on Thursday that unresolved issues could “adversely affect” its ability to report results of operations in a timely and accurate manner.

In its annual report for the fiscal year ended June 30, Super Micro repeated similar statements from its May quarterly filing, adding that it was working to address the problems.

Last year, the San Jose, California-based company missed an August deadline to file its annual financial report and Ernst & Young LLP resigned as its auditor in October, citing concerns about governance and transparency.

Super Micro had filed its long-delayed annual report earlier this year.

The company is set to lose over $1 billion from its market value of about $26 billion, if Friday’s losses hold.

Super Micro trades at 16.28 times the estimates of its earnings for the next 12 months, compared with 13.12 times for Dell and 10.81 times for Hewlett Packard Enterprise.

Among the 19 brokerages covering Super Micro, seven rate the stock “buy”, nine “hold” and three “sell”, with a median price target of $49, according to data compiled by LSEG.

Meanwhile, shares of rival Dell fell about 10% on Friday as high manufacturing costs for AI-driven servers and rising competition offset its bullish demand forecast for AI infrastructure.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi)