Super Micro Computer (SMCI) shares have dropped 15% following the announcement that the U.S. Justice Department (DOJ) is investigating the company. The Wall Street Journal reported that this investigation is still in its early stages, with a prosecutor from the U.S. attorney’s office seeking information about a former employee who had previously accused Super Micro of accounting irregularities.
The DOJ’s inquiry comes shortly after Hindenburg Research, a well-known short selling firm, released a report alleging “accounting manipulation” by Super Micro. Subsequently, the company postponed the release of its annual report to the U.S. Securities and Exchange Commission (SEC), which regulates the stock market.
Super Micro’s stock has faced significant pressure, falling nearly 30% in the last month alone. Nevertheless, it remains up 42% year-to-date. Earlier this year, the company’s shares were among the top performers in the S&P 500 index, faring well against competitors like Nvidia.
The Justice Department has not made any public statements regarding the investigation into Super Micro. The company produces servers utilized in various sectors, including data storage and artificial intelligence, for clients such as Nvidia.
Regarding investment prospects, Super Micro Computer currently holds a consensus Hold rating from 13 Wall Street analysts, comprised of two Buy, ten Hold, and one Sell ratings issued in the past three months. The average price target for the stock is $613.92, suggesting a potential upside of 52.55% from its current price.