Super Micro Computer (SMCI -5.40%), often called Supermicro, has taken investors on quite the roller-coaster ride since the start of 2024. Once the hottest stock on Wall Street, it now sits around 60% below its all-time high. This makes it look like a deep value play, as the stock price looks fairly cheap compared to some of its artificial intelligence (AI) peers.

So, could Supermicro make a massive comeback this year? Let's dive in.

Supermicro's DLC technology sets it apart from the competition

Super Micro Computer makes hardware for computing servers, a vital part of the AI buildout. In this space, Supermicro competes with other players like Dell (DELL -1.91%) and IBM (IBM -1.23%). There really isn't a ton to differentiate each of the players in the field, as the components for these servers are fairly commoditized. However, Supermicro has a few advantages over some of its competitors.

First is the flexibility Supermicro provides customers. Compared to its competition, Supermicro offers unparalleled customization, which is nice because clients may want to tailor their servers to run a specific size model or use them for a particular application. Additionally, Supermicro's DLC (direct liquid-cooled) technology gives its servers an advantage over traditional air-cooled servers. Supermicro claims that DLC technology provides 40% energy savings and 80% space savings. DLC servers do not need to allow for significant airflow across the computing hardware because water is cooling, so this makes a ton of sense on paper.

Overall, Supermicro is a strong player in the server hardware sector and has established itself as a high-end option. However, the company has encountered a few speed bumps along the way.

Official quarterly reports still haven't been filed with the SEC

Part of what triggered Supermicro's stock decline was allegations from the now-dissolved short-seller Hindenburg Research. Hindenburg claimed that Supermicro was involved in accounting manipulation, which triggered a Department of Justice investigation. This crashed the stock. Further adding to the matter, Supermicro's accounting firm resigned because it wasn't willing to be associated with the results. However, a third-party auditor found no misconduct by the company, although it did recommend replacing the CFO (which Supermicro is doing).

Supermicro has a new accounting firm but has yet to file its end-of-year 10-K form, which was due late in the summer of last year, or any other quarterly statements after that. So, Supermicro has yet to file three quarterly documents with the SEC, which is still concerning for many investors. Furthermore, Supermicro stated on its conference call for the second quarter of fiscal year 2025 (ended Dec. 31) that it would answer no questions regarding the filing status of any of these critical documents. However, the company expects it will be able to file these forms by Feb. 25, which is right around the corner.

This clearly raises some questions, as investors want to know if what they have been told is legitimate. Right now, investors are relying on management updates (although official results are near). Still, these updates haven't been all that great.

Supermicro's stock looks cheap, but there's a catch

In its second quarter, Supermicro's revenue rose about 54% year over year, with revenue expected to be between $5.6 billion and $5.7 billion. While that sounds like impressive growth, those results came in on the low end of Q1 guidance, which projected between $5.5 billion and $6.1 billion in revenue.

Furthermore, Supermicro continues to decrease its fiscal year 2025 revenue guidance. When it delivered its initial 2025 guidance, management called for sales between $26 billion and $30 billion. Now, it expects between $23.5 billion and $25 billion. Normally, news like this would sink a stock, but since Supermicro announced earnings on Feb. 11, the stock is up around 45%.

So, is this stock still a buy? I'd say it all depends on your risk tolerance. There's still a lot going on with Supermicro's SEC filings being delayed, and falling revenue expectations aren't great. However, Supermicro is still growing rapidly to meet the incredible demand for server hardware. Additionally, the stock is still pretty cheap at 18 times forward earnings.

SMCI PE Ratio (Forward) data by YCharts

However, as mentioned above, server hardware is a commoditized business, so Supermicro stock is unlikely to fetch a premium valuation like some of its big tech clients.

As a result, I think I will stay away from Supermciro's stock, as success is far from a sure thing. There are other AI stocks that look far more promising and where success is much more probable, and I'd rather stick my investing dollars there than risk losing a chunk of my investment from knee-jerk reactions in the market caused by Super Micro Computer headlines.