Group 1: Amazon - Amazon has transformed from an online bookstore to a leader in e-commerce and cloud computing, creating trillions in shareholder value [4] - The company has a two-pronged AI strategy: renting out AI computing power through Amazon Web Services (AWS) and incorporating AI technology throughout its operations [5] - CEO Andy Jassy indicated that AI will help reduce the corporate workforce, potentially increasing the company's bottom line even with modest topline growth [6] - Amazon's second-quarter net sales rose 13% year over year to $167.7 billion, while operating profits increased 31% to $19.2 billion [7] - The stock has a forward price-to-earnings (P/E) multiple of 35, suggesting it is reasonably priced for its long-term potential [8] Group 2: Super Micro Computer - Super Micro Computer offers a cheaper alternative for investors compared to Nvidia, with a forward P/E of 16 versus Nvidia's 39 [10] - The company operates on the infrastructure side of AI, selling the hardware needed for enterprises to build software solutions, which provides some protection from the challenges faced by AI software companies [11] - Super Micro's fourth-quarter sales increased 7.5% year over year to $5.8 million, which is considered modest but acceptable given its low valuation [12]

Core Insights - Super Micro Computer (SMCI) stock has declined nearly 29% in the past month as investors reassess its position in the AI sector [2] - The company's Q4 2025 earnings fell short of expectations, revealing ongoing margin pressures and significant weaknesses in financial reporting controls [2][5] Financial Performance - In Q4 2025, SMCI's sales grew by only 8% year-over-year to $5.8 billion, while earnings per share dropped from $0.46 in Q4 2024 to $0.31 [3] - Gross margins decreased sharply from 17% in Q4 FY'23 to 9.5% in Q4 FY'25, attributed to price reductions for new design contracts and costs related to Nvidia's platform transition [3] - The company has cut its full-year revenue forecast twice, reducing the initial expectation of 87% growth to only 49%, indicating challenges in demand forecasting [4] Competitive Landscape - SMCI faces intensified competition from larger companies like Dell, HPE, and Lenovo, which offer broader product lines and stronger supply chains [3] - The server market is becoming increasingly commoditized, putting SMCI at risk of operating within a low-margin business model [3] Corporate Governance Issues - SMCI has a history of failing to meet ambitious promises, consistently falling short of consensus earnings predictions, which raises concerns about its growth trajectory [4] - Recent allegations of accounting discrepancies and delays in SEC filings have further damaged the company's reputation [5]

Core Insights - The S&P 500 index experienced a 1.9% gain from the end of July to August 29, despite some tech stocks facing significant declines [1] Group 1: Company Performance - The Trade Desk's shares dropped 36.5% in August after reporting a 19% year-over-year revenue growth for Q2, which indicated a deceleration in growth [4][5] - Super Micro Computer's stock fell 26.7% in August following a 7.4% year-over-year sales growth to $5.8 billion and a decline in net income from $297 million to $195 million [8][10] - Gartner's stock decreased due to concerns that new AI tools are making its enterprise-level subscriptions less relevant, with global contract value growing only 4.9% year over year to $5.0 billion [11][12] Group 2: Market Outlook - The Trade Desk's forecast for Q3 revenue of at least $717 million implies a 14% year-over-year gain, which investors view as a sign of competitive weakness against Amazon's ad business [5][6] - Super Micro Computer revised its fiscal 2026 revenue prediction to $33 billion, a significant drop from the previous estimate of $40 billion, raising concerns about its growth trajectory [9][10] - Gartner is introducing its own AI application, AskGartner, to retain clients amid competition from general-use AI tools, which is reportedly off to a strong start [12][13]

Investment Rating - The report maintains a constructive outlook on shares of Amphenol Corp (APH), Dell Technologies (DELL), Corning Inc (GLW), Hewlett Packard Enterprise (HPE), and the memory/disk drive sector including Seagate Technology (STX), Western Digital Corp (WDC), and SanDisk Corp (SNDK) [4]. Core Insights - The upcoming Citi's 33rd annual Global Technology Conference will feature over 240 technology companies, focusing on updates regarding customer and enterprise demand dynamics, as well as supply chain conditions [1]. - Key investor questions include the impact of Generative AI on infrastructure spending, enterprise spending intentions, consumer spending trends, margin impacts from rising component costs, and capital allocation strategies [2][3]. Company Summaries - **Amphenol Corp (APH)**: Current price at $109.36 with a market cap of $133.52 billion. The target price is set at $125.00 with an expected share price return of 14.3% [7]. - **CDW Corp (CDW)**: Current price at $167.00 with a market cap of $21.89 billion. The target price is $200.00 with an expected share price return of 19.8% [7]. - **Corning Inc (GLW)**: Current price at $65.77 with a market cap of $56.34 billion. The target price is $72.00 with an expected share price return of 9.5% [7]. - **Dell Technologies (DELL)**: Current price at $130.84 with a market cap of $88.50 billion. The target price is $160.00 with an expected share price return of 22.3% [7]. - **Hewlett Packard Enterprise (HPE)**: Current price at $22.45 with a market cap of $29.46 billion. The target price is $25.00 with an expected share price return of 11.4% [7]. - **SanDisk Corp (SNDK)**: Current price at $46.37 with a market cap of $6.76 billion. The target price is $57.00 with an expected share price return of 22.9% [7]. - **Seagate Technology (STX)**: Current price at $159.19 with a market cap of $33.86 billion. The target price is $167.00 with an expected share price return of 4.9% [7]. - **Western Digital Corp (WDC)**: Current price at $76.97 with a market cap of $26.70 billion. The target price is $88.00 with an expected share price return of 14.3% [7].

Company Overview - Philippe Laffont, founder of Coatue Management, is recognized as a prominent tech investor and part of the Tiger Cubs group, which emerged from Julian Robertson's Tiger Management in the 1990s [1][2][3] - Coatue Management's equity holdings were valued at approximately $35 billion at the end of Q2 [3] Super Micro Computer (SMCI) - Coatue sold its stake in Super Micro Computer in Q2 after initially investing in the stock during Q4 of 2024 [4][9] - Super Micro Computer has faced volatility, particularly after a short report from Hindenburg Research alleged potential accounting fraud, which led to a significant stock price drop [6][9] - Despite challenges, Super Micro Computer provided strong fiscal 2026 guidance of $40 billion in revenue, surpassing consensus expectations [8] - The stock has increased by about 46% this year, indicating that Coatue's timing in trading was effective [9] Oracle Corporation (ORCL) - Oracle, with a market cap of nearly $664 billion, is positioned to benefit from the AI capital expenditure boom, and Coatue purchased over 3.8 million shares valued at over $843 million in Q2 [11] - The company reported strong earnings, with cloud infrastructure revenue expected to grow by 70% in fiscal year 2026, following a 52% growth in fiscal 2025 [13] - Oracle's CEO highlighted the company's strong data advantage and comprehensive database capabilities, positioning it well for AI applications [14] - The stock has appreciated over 336,000% since its IPO and is up over 41% this year, trading at 34 times forward earnings, reflecting strong growth potential despite not being classified among the "Magnificent Seven" tech stocks [16]

Group 1 - The semiconductor sector experienced significant declines, with major companies like Micron Technology dropping over 17% [1] - NVIDIA's two-times leveraged ETF fell by 7.4%, indicating a broader market reaction to semiconductor stocks [1] - Other notable declines included Advanced Micro Devices (AMD) down 3.3%, and TSMC ADR down 2.9%, reflecting a negative sentiment across the industry [1] Group 2 - The overall semiconductor ETF decreased by 2.9%, suggesting a bearish trend in the semiconductor market [1] - Companies such as Supermicro and Arm Holdings also faced declines of 4.9% and 3.1% respectively, highlighting widespread weakness [1] - The performance of related companies like Amphenol and Nova also showed declines, with drops of 3.3% and 4.2% respectively [1]

Core Viewpoint - Super Micro Computer (SMCI.US) has warned of weaknesses in its financial disclosure controls, which could impair the company's ability to report financial results "in a timely and accurate manner" [1] Financial Control Issues - The company identified problems in its financial controls as of June 30, leading to a conclusion that its internal controls over financial reporting were ineffective due to significant deficiencies [1] - Super Micro missed the deadline for submitting its annual financial report for 2024 in August and faced concerns from its auditor, Ernst & Young, regarding governance and transparency, resulting in the auditor's resignation in October [1] Remedial Actions - The company has initiated remedial measures to address the identified significant deficiencies but cannot guarantee that these efforts will be sufficient to conclude that controls will be effective in the future [1] - In a document dated March 31, the company outlined a series of measures taken to improve financial controls, stating that while progress has been made, the implementation and evaluation of these processes require more time [1] Stock Performance - The stock price of Super Micro surged by 88% earlier this year due to optimistic market sentiment regarding the demand for AI devices, but it subsequently fell by 23% after the company lowered its revenue forecast for the fiscal year on August 5 [1] - As of the latest close, the stock's year-to-date gain has narrowed to 44% [1]

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Super Micro Computer delivers AI and HPC optimized rack-scale IT solutions, focusing on rapid innovation and global manufacturing - Company provides total IT solutions for AI, HPC, enterprise, cloud, and edge computing, emphasizing rack-scale, liquid-cooled solutions[15](index=15&type=chunk)[16](index=16&type=chunk)[23](index=23&type=chunk) - Strategy focuses on continuous R&D, rapid product innovation (leveraging Building Block Solutions®), and capitalizing on new technologies like AI, cloud, and 5G/edge computing[19](index=19&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - Key product developments in FY2025 include AI-focused solutions for NVIDIA's Hopper (H100/H200) and Blackwell (GB200/B200/RTX Pro 6000) platforms, Data Center Building Block Solutions (DCBBS) for liquid-cooled AI factories, and DLC-2 for energy efficiency[23](index=23&type=chunk) - Global operations include headquarters in Silicon Valley, facilities in Taiwan and the Netherlands, and a new facility in Malaysia to expand capacity[18](index=18&type=chunk)[27](index=27&type=chunk) International Sales as % of Net Sales | Fiscal Year | Percentage | | :---------- | :--------- | | 2025 | 40.6% | | 2024 | 32.0% | | 2023 | 32.1% | - Competes with global technology vendors (Cisco, Dell, Hewlett-Packard Enterprise, and Lenovo) and ODMs (Foxconn, Quanta Computer, and Wiwynn Corporation) based on time-to-market, product breadth, performance, and cost-effectiveness[48](index=48&type=chunk)[49](index=49&type=chunk) - As of June 30, 2025, the company employed **6,238 employees**, with over **3,200 in R&D**, and emphasizes talent development, equal opportunity, and a comprehensive total rewards program[60](index=60&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk) [Item 1A. Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from SEC reporting, global operations, regulatory compliance, and financial indebtedness - Past SEC reporting delinquencies (FY2024 10-K, Q1/Q2 2025 10-Q) led to significant expenses, negative publicity, and potential impact on financial reporting accuracy and stock price[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - Identified material weaknesses in internal control over financial reporting as of June 30, 2025, which could affect timely and accurate financial reporting if not remediated[91](index=91&type=chunk)[92](index=92&type=chunk) - Sales are concentrated in a few large customers; **four customers accounted for 10% or more of net sales in FY2025**, and one in FY2024, increasing dependency and risk of revenue decrease[99](index=99&type=chunk)[100](index=100&type=chunk) - Vulnerable to volatility in core component markets (e.g., GPUs, CPUs, memory), supply chain disruptions, and increased costs, which can impact product delivery, warranty claims, and financial results[107](index=107&type=chunk)[108](index=108&type=chunk) - Geopolitical conditions, particularly U.S.-China trade tensions and export control restrictions on AI-related technologies (e.g., GPUs), significantly impact business, supply chains, and ability to serve international markets[113](index=113&type=chunk)[115](index=115&type=chunk)[161](index=161&type=chunk) - Subject to complex and evolving domestic and international data privacy and protection laws (e.g., GDPR, CCPA, CPRA), increasing compliance costs and potential for penalties or reputational harm[174](index=174&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk) - Indebtedness of approximately **$4.8 billion as of June 30, 2025**, including convertible notes, could limit cash flow, restrict financing options, and dilute existing stockholders[190](index=190&type=chunk)[193](index=193&type=chunk) - Conflicts of interest may arise with related parties Ablecom and Compuware, who are major contract manufacturers and distributors, due to shared family ownership and management ties[125](index=125&type=chunk)[128](index=128&type=chunk)[132](index=132&type=chunk) [Item 1B. Unresolved Staff Comments](index=37&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC [Item 1C. Cybersecurity](index=37&type=section&id=Item%201C.%20Cybersecurity) The company maintains an information security program aligned with industry standards, with Board oversight of cybersecurity - Cybersecurity risk management includes infrastructure, systems, policies, and procedures for proactive and reactive threat addressing, following industry standards[204](index=204&type=chunk) - The Board and Audit Committee provide oversight of cybersecurity matters, receiving regular updates from management[209](index=209&type=chunk) - No cyber incidents in the past had a material adverse effect on business strategy, operations, or financial conditions[208](index=208&type=chunk) [Item 2. Properties](index=38&type=section&id=Item%202.%20Properties) As of June 30, 2025, the company owned 3.16 million sq ft and leased 1.54 million sq ft globally Owned and Leased Space (as of June 30, 2025) | Category | Square Footage (approx.) | | :------- | :----------------------- | | Owned | 3,157,000 | | Leased | 1,539,000 | - Long-lived assets outside the U.S. represented **37.8% of total value in fiscal year 2025**[212](index=212&type=chunk) - Key facilities are in San Jose, California (headquarters, R&D, production), Taiwan (manufacturing, R&D, service, warehouse), Netherlands (European headquarters, manufacturing, service), and a new facility in Malaysia (manufacturing)[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) [Item 3. Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) The company faces multiple class action and derivative lawsuits, plus DOJ and SEC subpoenas, with uncertain outcomes - Facing multiple putative class action and derivative lawsuits alleging misrepresentations in financial statements and internal controls, with outcomes currently not estimable[673](index=673&type=chunk)[676](index=676&type=chunk) - Received subpoenas from the Department of Justice and SEC following a short seller report, and is cooperating with document requests[678](index=678&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) SMCI common stock trades on Nasdaq, underwent a 10-for-1 split, expects no dividends, and repurchased shares - Common stock (SMCI) trades on Nasdaq Global Select Market; **10-for-1 forward stock split effective September 30, 2024**[221](index=221&type=chunk)[224](index=224&type=chunk) - As of July 31, 2025, there were **594,273,308 shares of common stock outstanding**[6](index=6&type=chunk) - No cash dividends are expected to be paid in the foreseeable future[226](index=226&type=chunk) Issuer Purchases of Equity Securities (Q4 FY2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----- | :------------------------------- | :--------------------------- | | June 2025 | 4,891,171 | $40.89 | - The repurchase in June 2025 was for approximately **$200.0 million**, conducted concurrently with the 2030 Convertible Notes offering, and the shares were retired[236](index=236&type=chunk) [Item 6. [Reserved]](index=45&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Super Micro Computer, profitable since 1993, focuses on AI and data center IT solutions, with financial results detailed - Company has been **profitable every year since inception in 1993**[242](index=242&type=chunk) - Strategic focus on Application-Optimized Total IT Solutions, integrating server, storage, networking, and software at rack and cluster levels, with a key component being DCBBS for liquid-cooled AI factories[241](index=241&type=chunk)[243](index=243&type=chunk) - AI and data center demand is a substantial driver for product demand, and the company plans to enhance product capabilities and service offerings in these areas[245](index=245&type=chunk) Financial Highlights (in millions) | Metric | FY2025 | FY2024 | Change (YoY) | % Change (YoY) | | :----- | :----- | :----- | :----------- | :------------- | | Net sales | $21,972.0 | $14,989.2 | $6,982.8 | 46.6% | | Gross profit | $2,429.9 | $2,061.4 | $368.5 | 17.9% | | Total operating expenses | $1,176.9 | $850.6 | $326.3 | 38.4% | | Income from operations | $1,253.0 | $1,210.8 | $42.2 | 3.5% | | Net income | $1,048.9 | $1,152.7 | $(103.8) | (9.0)% | | Net income per diluted share | $1.68 | $1.92 | $(0.24) | (12.5)% | - Gross margin decreased to **11.1% in fiscal year 2025** from **13.8% in fiscal year 2024** due to competitive pricing, product/customer mix changes, and higher manufacturing expenses[251](index=251&type=chunk)[285](index=285&type=chunk) - Operating expenses increased by **38.4% in fiscal year 2025**, primarily due to higher headcount, salaries, and stock-based compensation[251](index=251&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk) Net Sales by Product Type (in millions) | Product Type | FY2025 | FY2024 | FY2023 | 2025 vs 2024 % Change | 2024 vs 2023 % Change | | :----------- | :----- | :----- | :----- | :-------------------- | :-------------------- | | Server and storage systems | $21,311.6 | $14,185.2 | $6,569.8 | 50.2% | 115.9% | | Subsystems and accessories | $660.4 | $804.0 | $553.7 | (17.9)% | 45.2% | | Total net sales | $21,972.0 | $14,989.2 | $7,123.5 | 46.6% | 110.4% | - Server and storage systems sales increased by **50.2% in fiscal year 2025**, driven by strong demand for GPU servers, HPC, and rack-scale solutions, with a **34% increase in average selling price**[276](index=276&type=chunk) Net Sales by Geographic Region (in millions) | Region | FY2025 | FY2024 | FY2023 | 2025 vs 2024 % Change | 2024 vs 2023 % Change | | :----- | :----- | :----- | :----- | :-------------------- | :-------------------- | | United States | $13,052.6 | $10,187.2 | $4,834.1 | 28.1% | 110.7% | | Asia | $5,494.1 | $2,912.6 | $1,050.8 | 88.6% | 177.2% | | Europe | $2,727.0 | $1,294.0 | $1,003.1 | 110.7% | 29.0% | | Others | $698.3 | $595.4 | $235.5 | 17.3% | 152.8% | | Total net sales | $21,972.0 | $14,989.2 | $7,123.5 | 46.6% | 110.4% | - Net cash provided by operating activities was **$1,659.5 million in fiscal year 2025**, a significant increase from **$(2,486.0) million in fiscal year 2024**, driven by increased cash collection from customers and reduced inventory purchases[311](index=311&type=chunk)[312](index=312&type=chunk) - Cash and cash equivalents increased to **$5,169.9 million as of June 30, 2025**, from **$1,669.8 million in fiscal year 2024**[308](index=308&type=chunk) - Issued **$700.0 million in 2028 Convertible Notes** and **$2.3 billion in 2030 Convertible Notes** in fiscal year 2025[104](index=104&type=chunk)[314](index=314&type=chunk) - Anticipates capital expenditures of **$180.0 million to $200.0 million for fiscal year 2026**, primarily for global manufacturing, tooling, IT investments, and facility upgrades[316](index=316&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate and foreign exchange risks, with minimal expected impact from 10% rate changes - Exposed to interest rate risk on fixed-rate investments and variable-rate debt (term loans, revolving lines of credit), but a **10% change is not expected to have a significant impact**[321](index=321&type=chunk)[323](index=323&type=chunk) - Direct exposure to foreign exchange rate fluctuations is minimal as most sales and purchases are in U.S. dollars; a **10% change is not expected to have a significant impact**[324](index=324&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for FY2025-2023, including balance sheets and cash flows - Consolidated financial statements for FY2025, FY2024, and FY2023 are presented, audited by BDO USA, P.C. (2025, 2024) and Deloitte & Touche LLP (2023)[329](index=329&type=chunk)[345](index=345&type=chunk) - BDO USA, P.C. expressed an **adverse opinion on the effectiveness of internal control over financial reporting as of June 30, 2025**[331](index=331&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :----- | :------------ | :------------ | | Total current assets | $12,301,654 | $8,931,960 | | Total assets | $14,018,429 | $9,826,092 | | Total current liabilities | $2,344,792 | $2,345,721 | | Total liabilities | $7,716,558 | $4,408,722 | | Total stockholders' equity | $6,301,871 | $5,417,370 | Consolidated Statements of Operations Highlights (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----- | :----- | :----- | :----- | | Net sales | $21,972,042 | $14,989,251 | $7,123,482 | | Gross profit | $2,429,922 | $2,061,410 | $1,283,012 | | Income from operations | $1,252,994 | $1,210,774 | $761,142 | | Net income | $1,048,854 | $1,152,666 | $639,998 | | Diluted EPS | $1.68 | $1.92 | $1.14 | Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----- | :----- | :----- | :----- | | Net cash provided by (used in) operating activities | $1,659,524 | $(2,485,972) | $663,580 | | Net cash used in investing activities | $(183,214) | $(194,248) | $(39,486) | | Net cash provided by (used in) financing activities | $2,024,045 | $3,911,724 | $(448,293) | - Inventories increased to **$4.68 billion in fiscal year 2025** from **$4.33 billion in fiscal year 2024**. Write-down adjustments for excess and obsolete inventory totaled **$232.0 million in fiscal year 2025**, up from **$83.0 million in fiscal year 2024**[468](index=468&type=chunk) - Total revenue from service and software increased to **$330.5 million in fiscal year 2025** from **$228.3 million in fiscal year 2024**[449](index=449&type=chunk) - **Four customers accounted for 10% or more of net sales in fiscal year 2025** (Customer A: **20.9%**, Customer B: **11.5%**, Customer C: **11.3%**, Customer D: **11.1%**)[419](index=419&type=chunk) - **Two suppliers accounted for a significant portion of total purchases in fiscal year 2025** (Supplier A: **64.4%**, Supplier B: **5.1%**)[414](index=414&type=chunk) - Convertible notes outstanding include **$1.7 billion of 2029 Convertible Notes**, **$700.0 million of 2028 Convertible Notes**, and **$2.3 billion of 2030 Convertible Notes**[536](index=536&type=chunk)[550](index=550&type=chunk)[560](index=560&type=chunk) - Related party transactions with Ablecom and Compuware (contract manufacturing, distribution) represented **3.3% of cost of sales in fiscal year 2025**[416](index=416&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=125&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) EY resigned as auditor in October 2024, citing governance concerns, but a Special Committee found their conclusions unsupported - EY resigned as independent auditor in **October 2024**, citing concerns about governance, transparency, internal controls, and inability to rely on management/Audit Committee representations[705](index=705&type=chunk) - EY's resignation led to delinquent filings of the FY2024 10-K and Q1/Q2 FY2025 10-Qs, which were subsequently filed by **February 25, 2025**[708](index=708&type=chunk) - A Special Committee review concluded that EY's resignation and conclusions were **not supported by the facts examined**, finding no substantial concerns about senior management integrity or Audit Committee oversight[712](index=712&type=chunk) [Item 9A. Controls and Procedures](index=126&type=section&id=Item%209A.%20Controls%20and%20Procedures) Disclosure controls were ineffective as of June 30, 2025, due to material internal control weaknesses, with remediation underway - Disclosure controls and procedures were **not effective as of June 30, 2025**, due to material weaknesses in internal control over financial reporting[710](index=710&type=chunk) - Identified material weaknesses include: (i) IT general controls for certain financial reporting systems, (ii) segregation of duties conflicts, (iii) completeness and accuracy of information, and (iv) documentation of control procedures for timely recording and disclosure, including related party transactions[715](index=715&type=chunk) - Remediation plan includes enhancing accounting competencies, implementing standard policies for manual journal entries, completing a risk-based review of IT architecture, and redesigning ERP system security[721](index=721&type=chunk)[724](index=724&type=chunk) - BDO USA, P.C. issued an **adverse opinion on the effectiveness of internal control over financial reporting as of June 30, 2025**[729](index=729&type=chunk)[734](index=734&type=chunk) [Item 9B. Other Information](index=132&type=section&id=Item%209B.%20Other%20Information) This section discloses Rule 10b5-1 trading arrangements adopted by executive officers and directors in Q4 FY2025 - David Weigand (SVP, CFO, CCO) adopted a Rule 10b5-1 trading arrangement on **May 30, 2025**, for **50,000 shares**[739](index=739&type=chunk) - Sara Liu (Co-Founder, SVP, Director) adopted a Rule 10b5-1 trading arrangement on **May 29, 2025**, for **600,000 shares**[739](index=739&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=132&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company has no disclosures regarding foreign jurisdictions that prevent inspections PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=133&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section lists executive officers and directors, detailing Board composition, governance, and independent committees - Charles Liang serves as President, CEO, and Chairman; Sara Liu as Co-Founder, SVP, and Director; Yih-Shyan (Wally) Liaw as Co-Founder, SVP Business Development, and Director[744](index=744&type=chunk)[749](index=749&type=chunk)[750](index=750&type=chunk) - **Six of nine current Board members** (Judy Lin, Robert Blair, Scott Angel, Sherman Tuan, Susan Mogensen, Tally Liu) are independent[767](index=767&type=chunk) - The Board has three standing committees (Audit, Compensation, Governance), all composed solely of non-employee, independent directors[777](index=777&type=chunk) - Tally Liu was re-appointed as lead independent director for a one-year term expiring **January 2026**[774](index=774&type=chunk) - Scott Angel, appointed **March 2025**, is an "audit committee financial expert" with extensive audit and technology industry experience[753](index=753&type=chunk)[778](index=778&type=chunk) [Item 11. Executive Compensation](index=143&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation links NEO pay to corporate performance, with CEO Charles Liang's compensation almost entirely performance-based - Executive compensation philosophy links a significant portion of NEO compensation to corporate performance, reducing reliance on fixed compensation[800](index=800&type=chunk) - CEO Charles Liang's compensation is almost entirely performance-based, with a **$1 annual salary** and no cash bonuses, tied to the 2021 and 2023 CEO Performance Awards[801](index=801&type=chunk)[802](index=802&type=chunk)[803](index=803&type=chunk) - As of June 30, 2025, all five tranches of the **2021 CEO Performance Award (10,000,000 shares) had vested**[801](index=801&type=chunk)[819](index=819&type=chunk) - For the 2023 CEO Performance Award (**5,000,000 shares**), **four of five stock price goals** ($45, $60, $75, $90) and **all five revenue goals** ($13.0B, $15.0B, $17.0B, $19.0B, $21.0B) were achieved by August 2025, resulting in **4,000,000 shares vested**[804](index=804&type=chunk)[831](index=831&type=chunk)[835](index=835&type=chunk) - Other NEOs (Weigand, Clegg, Kao) participate in the FY2025 Performance Program, which includes Base Salary, Fixed Bonus, and a Performance Incentive Award (mix of cash and service-based RSUs) tied to individualized KPIs (e.g., stock price, revenue growth, customer growth, inventory)[800](index=800&type=chunk)[809](index=809&type=chunk)[849](index=849&type=chunk) FY2025 Summary Compensation for NEOs (in thousands) | Name | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Total ($) | | :--- | :--------- | :-------- | :--------------- | :---------------- | :----------------------------------------- | :-------- | | Charles Liang | 1 | — | — | — | — | 442 | | David Weigand | 557,958 | 180,979 | 1,166,317 | — | 55,638 | 1,961,333 | | Don Clegg | 426,474 | 109,384 | 661,883 | — | 139,534 | 1,337,716 | | George Kao | 417,823 | 69,822 | 813,363 | 510,915 | 58,851 | 1,871,315 | - The CEO pay ratio for fiscal year 2025 was **0.16 to 1**, with CEO compensation of **$13,518** and median employee compensation of **$86,832**[928](index=928&type=chunk) - The company adopted a new compensation clawback policy (effective **Oct 25, 2023**) compliant with Nasdaq and SEC rules, allowing recovery of excess incentive-based compensation in case of accounting restatements[890](index=890&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=172&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details beneficial ownership of common stock for NEOs, directors, and major stockholders as of July 31, 2025 Beneficial Ownership as of July 31, 2025 | Owner Category | Amount of Beneficial Ownership | Percent of Common Stock Outstanding | | :------------- | :----------------------------- | :-------------------------------- | | Charles Liang & Sara Liu | 82,071,594 | 13.5% | | All directors and executive officers as a group | 98,904,662 | 16.2% | | BlackRock, Inc. | 41,338,350 | 7.0% | | The Vanguard Group | 61,946,070 | 10.4% | - As of June 30, 2025, **55,276,780 shares were subject to outstanding options and RSU awards**, with **17,217,058 shares remaining available for future issuance** under equity compensation plans[958](index=958&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=173&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) The Audit Committee reviews related party transactions, with significant business relationships with Ablecom and Compuware - Audit Committee is responsible for reviewing and approving related person transactions, with specific procedures to ensure independence and alignment with company interests[960](index=960&type=chunk) - Significant related party transactions with Ablecom and Compuware, where Charles Liang and Sara Liu (CEO and Director) have ownership in Ablecom, and other family members hold positions/ownership in both[969](index=969&type=chunk)[970](index=970&type=chunk) - Purchases from Ablecom totaled **$321.9 million in fiscal year 2025** (vs. **$269.3 million in FY2024**), and from Compuware totaled **$328.3 million in fiscal year 2025** (vs. **$280.8 million in FY2024**)[976](index=976&type=chunk)[977](index=977&type=chunk) - Outstanding non-cancelable purchase orders to Ablecom were **$30.6 million** and to Compuware were **$118.3 million as of June 30, 2025**[978](index=978&type=chunk)[979](index=979&type=chunk) - CEO Charles Liang has an unsecured loan of approximately **$16.8 million** (including interest) from Steve Liang's spouse, dating back to **October 2018**[985](index=985&type=chunk) [Item 14. Principal Accountant Fees and Services](index=177&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) BDO USA, P.C. was appointed as the independent auditor for FY2024 onwards, with all services pre-approved - BDO USA, P.C. was appointed as the independent registered public accounting firm starting **fiscal year 2024**[987](index=987&type=chunk) Independent Registered Public Accounting Firm Fees (in thousands) | Fee Type | FY2025 | FY2024 | | :------- | :----- | :----- | | Audit Fees | $8,263 | $8,578 | - The Audit Committee pre-approves all audit and permissible non-audit services to ensure auditor independence[990](index=990&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=177&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This item lists all documents filed as part of the 10-K report, including financial statements and exhibit index [Item 16. Form 10-K Summary](index=182&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is marked "None," indicating no summary is provided

Group 1 - Super Micro Computer, Inc. (NASDAQ: SMCI) was initially rated as a Strong Buy in December 2022 when it was relatively unknown [1] - The analysis of SMCI stock is conducted by a chief investment analyst at a family office, indicating a professional level of scrutiny and expertise [1] - The investing group Beyond the Wall Investing provides access to high-quality analysis and insights similar to those used by institutional market participants [1]

Core Viewpoint - Super Micro Computer Inc (SMCI) is currently experiencing a significant decline in stock price, down 27% over the past month and more than 22% over the past year, contrasting sharply with Nvidia's strong performance, which could potentially influence SMCI positively if Nvidia reports strong earnings [1]. Stock Performance - SMCI shares are trading just above $44, with a 200-day moving average at $39.38, indicating that the stock is still above this long-term support level [2]. - However, short-term moving averages show weakness, as SMCI is trading below its 20-day ($48.21) and 50-day ($48.93) moving averages [2]. Technical Indicators - The Relative Strength Index (RSI) is at 39.82, suggesting that SMCI is nearing oversold territory, while the MACD is at -2.06, indicating bearish momentum [3]. - The stock is consolidating in a "green zone," where downside risk is limited, but upside potential depends on a catalyst [3]. Market Dynamics - Nvidia's performance is crucial for SMCI, as the company often trades in sympathy with Nvidia due to its role in AI-driven data center demand. Strong earnings from Nvidia could lead to increased demand for Super Micro's specialized systems [4]. - Conversely, if Nvidia's guidance is disappointing or if there is a shift away from AI hype, SMCI may struggle and test its 200-day moving average as support [5]. Volatility and Market Position - SMCI has experienced significant volatility, with a 52-week high of $66.44 and a low of $17.25. Currently, it is viewed more as a battleground stock rather than a growth stock, with its future performance hinging on Nvidia's earnings [6].