Super Micro Computer Inc (NASDAQ: SMCI) was among the most shorted S&P 500 tech stocks in May. Shares of the AI firm are up close to 200% for the year at writing.
What was Supermicro stock short interest in May?
Information technology weighs the most on the benchmark index and bets against it were up at large last month.
In May, short interest in the S&P 500 tech stocks climbed to 1.56% on average versus 1.42% in April.
But short interest in the high-flying SMCI stock far exceeded the average. At 7.26%, it was behind only two names in S&P 500 technology stocks in terms of short interest: Enphase Energy Inc and Western Digital Corp.
In late April, Supermicro said its revenue roughly tripled on a year-over-year basis to $3.85 billion in the first quarter but still fell short of $3.95 billion that analysts had forecast.
“We are growing our customer base strongly now”, said Charles Liang – chief executive of the Nasdaq-listed firm said at the time. Supermicro stock does not currently pay a dividend.
XLK – the technology select sector SPDR fund is up more than 20% for the year at writing.
Could SMCI shares be a target of short squeeze?
Even though the short interest in Supermicro shares was well above average for the S&P 500 technology stocks in May – it still does not put it at the risk of a short squeeze for several reasons.
To begin with, just over 7.0% is not a sufficient short interest for the retail traders to go after. Secondly, SMCI is not a penny stock and, therefore, is not subject to manipulation.
In April, Super Micro Computer raised its revenue guidance for the full year to the range of $14.3 billion to $14.7 billion. Analysts, in comparison, were at $14.60 billion. At the time, its CEO Liang also said:
Strong demand for AI rack scale PnP solutions, along with our team’s ability to develop innovative DLC designs, enabled us to expand our market leadership in AI infrastructure. As new solutions ramp, including fully production ready DLC, we expect to continue gaining market share.
Earlier in June, Barclays analyst George Wang maintained his “buy” rating on Supermicro stock. His $1,000 price objective suggests about a 20% upside from here.
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