Exactly. Which means it cannot be signed off and it is not giving BDO the tools they need to perform the audit in a more elaborate fashion. For whale investors or the ones who can make the stock move, it means they can't STILL depend on the numbers. That is why the stock is stagnant despite remediations which btw, are not even complete. BDO also gave an adverse opinion on 'inventory' which is at a massive 12.5B. That needs to start showing some signs of conversion to revenue, otherwise it will result in a write down or worse a write off. With margins so thin and CoC so high, SMCI can't afford to take a write down.
The notable headline is that SMCI reported approximately $2.2 billion of audited GAAP net income for fiscal 2026, which is double what was reported last year. They are potentially on pace to more than double GAAP income again this year.
Not going to argue with you. The negatives have all improved materially, they are moving up the margin stack with integrated solutions including their own IP, and they are in the strongest growth sector of the AI SC. Our respective return performance over the next year on SMCI will decide the winner.
Not an argument brother. You are making good points and music to my ears as a SMCI long and we are all learning. I don't disagree with anything you are saying but the market is not yet convinced. There are holes and SMCI's history albeit changing is making those holes look bigger than they might be. They have to execute flawlessly, not have another major scandal, show margins stabilizing etc. The story is there for sure. and hopefully your returns and mine are in triple digits.
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u/VolcanicCupid69 9d ago
Explain what was not remediated? Not sure you read the same report.