Supermicrocomputers (NASDAQ:SMCI) has faced a barrage of negative press in recent months. The U.S. Department of Justice launched an investigation into possible accounting irregularities, the company’s accountant abruptly resigned, and delays in filing the 10-K report all caused both confidence and shares to plummet.

The turnaround was particularly sharp for the company, whose shares had risen an astonishing 2,800% in the two years leading up to March 2024. This makes the decline of more than 80% in the past eight months even more striking.

Amid all the background noise, SMCI released its preliminary first-quarter 2025 results, with revenue expected to rise nearly 180% year-over-year to $5.9 billion to $6 billion. For the second fiscal quarter, the company expects net sales between $5.5 billion and $6.1 billion, representing a robust 58% increase over the prior year.

In light of these developments, a top investor, known under the pseudonym KM Capital, seizes this opportunity. Following Warren Buffett’s famous advice to “be greedy when others are fearful,” KM Capital believes the current recession could provide an opportunity for long-term gains.

“Super Micro Computer is significantly undervalued due to the likely exaggerated fear of accounting manipulation and the reported DOJ investigation, which presents a strong buying opportunity,” said the five-star investor, who ranks in the top 3% of TipRanks stock professionals.

KM Capital also highlights SMCI’s robust strategic partnerships with industry leaders such as Nvidia, AMD and Intel. The partnership with Nvidia was recently strengthened with a new partnership announced last month.

“This factor underlines Nvidia’s confidence in SMCI’s reliability,” the investor claims, adding that “it is highly unlikely that Jensen Huang or Lisa Su would risk their reputations by supporting collaboration with a company with questionable integrity or operational practices.”

And therein lies KM Capital’s biggest reason for rating SMCI stock as a Strong Buy; the investor simply does not believe that SMCI – which is under “intense public scrutiny” – would play fast and loose with its books. (To view KM Capital’s track record, click here)

Views on Wall Street may be more muted, but they still predict healthy profits ahead. With 3 Buy, 6 Hold, and 2 Sell ratings, SMCI claims a consensus Hold rating (i.e. Neutral). The average 12-month price target of $47.04 would imply a gain of ~153%. (To see SMCI Stock Rating)

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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is for informational purposes only. It is very important to do your own analysis before making an investment.