Financial writer discusses Super Micro Computer's drastic stock drop, accounting scandal, and limited upside potential despite overcoming challenges.

Though Supermicro has offered investors some signs of a turnaround in recent weeks, the company just got another bit of negative news last week: It will be exiting the Nasdaq 100 Index as of Dec. 23. This is part of the index's rebalancing, a time when certain stocks are added or removed.

Super Micro Computer shares slumped Monday morning as the stock felt the impact of a pair of headlines that came out after the bell Friday, including a potential capital raise and the stock's removal from the Nasdaq 100 Index.

Super Micro Computer Inc. has had a rough week with shares down double digits over four straight days. The artificial intelligence server maker looks to be breaking its previous yo-yo pattern where the stock has fallen,

This has been a highly volatile stock to own this year, and that trend may continue into 2025. While there hasn't been any new bad news to weigh on the stock, investors should tread carefully with Super Micro Computer. The best option at this stage may be a wait-and-see approach with the stock.

Shares of Super Micro Computer Inc. SMCI rose 5.96% to $34.33 Tuesday, on what proved to be an all-around positive trading session for the stock market, with the S&P 500 Index SPX rising 1.10% to 6,040.

For investors, the key question is whether management will be able to remove the doubts about the company’s finances when it does publish its earnings.