‘Bad Optics’: Top Investor Not Running Away From Super Micro Computer Stock

It couldn’t have been a fun day to be at the offices of Super Micro Computer (NASDAQ:SMCI) last week, as the news broke that individuals associated with the company (including a board member) had been indicted for breaking U.S. export controls.

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The three are accused of “conspiring to divert high-performance computer servers assembled in the United States and integrating sophisticated U.S. artificial intelligence technology to China,” according to the U.S. Department of Justice.

The market, already jolted by worries over AI spending, a war in the Middle East, and previous governance issues at Super Micro Computer, punished the company’s share price. SMCI is down over 30% over the past few days, as investors headed for the exits.

However, one top investor known by the pseudonym Stone Fox Capital isn’t running for the hills.

“Investors need to look beyond the bad optics and realize the business is booming due to AI demand,” states the 5-star investor, who is among the top 4% of stock pros covered by TipRanks.

While Stone Fox acknowledges that the news isn’t great, the investor also points out that SMCI wasn’t named as a defendant in the indictment. Moreover, the company’s press release in response to the developments emphasizes that it has been cooperating fully with the U.S. government “and will continue to do so.”

The company has guided for FY 2026 revenues of $40 billion, and the investor doesn’t believe that this number will be impacted by the allegations “suggesting limited financial hits.”

Looking forward, Stone Fox expects SMCI to deliver strong results going forward, including FY 2027 revenues of $50 billion. As more facts come to light, the investor thinks that the narrative will gradually shift back toward focusing on the company’s growth prospects.

“The stock was already cheap, with the selloff overdone given SMCI’s ongoing growth, new products, and absence of direct legal jeopardy,” adds Stone Fox, who rates SMCI a Strong Buy. (To watch Stone Fox Capital’s track record, click here)

In contrast to Stone Fox, a number of Wall Street analysts have been lowering their views of SMCI over the past few days. With 2 Buys, 8 Holds, and 3 Sells, SMCI carries a consensus Hold (i.e., Neutral) rating. Its 12-month average price target of $31.67 points to gains just shy of 50%. (See SMCI stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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