Mizuho: NVIDIA Might Miss Its Guidance If Super Micro Computer (SMCI) Fails To Find Operational Funding
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Super Micro Computer (SMCI), a retailer of high-performance servers and liquid-cooled AI racks, is in a veritable maelstrom at the moment, battling allegations of financial malfeasance, a preliminary DOJ investigation, an audit-related nightmare where the firm has lost its second auditor in around 18 months, and an imminent de-listing from the Nasdaq exchange. Now, a Mizuho analyst is arguing that NVIDIA might not be able to emerge from this saga unscathed, especially as Super Micro Computer constitutes its third-largest customer.
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To wit, Mizuho believes that, as an enterprise with a negative working capital paradigm that necessitates extensive external funding to purchase large volumes of GPUs and liquid-cooled products "to build multi-million dollar NVL72 Blackwell rack systems," Super Micro Computer might not be able to tap the requisite external liquidity in the coming days, owing to a growing host of risk factors.
Should SMCI face a funding deficit, it will have a direct bearing on NVIDIA, which is "now at risk of missing guidance," as per Mizuho's assessment.
The analyst goes on to note:
Meanwhile, as noted above, Super Micro Computer's travails are only getting more entrenched. First, Hindenburg Research leveled hard-hitting allegations against Super Micro Computer back in August, asserting that the server provider engaged in distribution channel stuffing by pushing products to distributors based on artificially inflated demand forecasts, undertook partial shipments to meet specific sales targets and inflated its total shipment count in the process, re-hired top executives responsible for "widespread accounting violations" that had resulted in a $17.5 million
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