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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.
Klein also warns that SMCI supplier NVIDIA is now at risk of missing guidance if SMCI cannot fund their business as they operate with negative working capital and require a lot of cash and funding to purchase large volumes of GPUs and liquid cooling…
— Kaushik (@BigBullCap) October 31, 2024
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…
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