00:00It seemed like we had gotten through that. And now, of course, we have these new charges coming
00:03out of the U.S. and at least one of the figures in this resigning from the board.
00:08Yeah, I mean, it's huge and it kind of ties in with the audit and governance issues that the
00:15companies has had in the past. And look, I mean, the good thing for Supermicro is it's in a market
00:22that is growing. I mean, Jensen Wong just gave a trillion dollar sales forecast through 2027.
00:28So from that perspective, you know, a Dell can do well in this market, a Supermicro can
00:33do well. And they had a really good quarter. But I think when you look at the pipeline, you
00:38have to ask yourself, who are the customers that Supermicro will have going forward, given
00:44the type of issues that it's dealing with right now? And that's where I think XAI is a big
00:50customer, but none of the other hyperscalers I think right now is a customer of Supermicro.
00:57Well, it's an interesting point, Mandeep. I mean, you mentioned that this company had
01:00had a pretty good quarter. It has some, you know, real-time customers here. But what is
01:06the reputational risk of being associated with a company like Supermicro? As Romain laid out
01:14here, they've been in this situation before. This isn't a first-time offense necessarily.
01:19Yeah, and the two metrics for me are backlog and gross margin. So when you compare backlog of
01:25Supermicro, it's around $13 billion. Compare that to, you know, Dell, which has got a $50 billion
01:31backlog for their AI servers. Gross margin for Supermicro have gone from 15% to 6.4% over a
01:40span of
01:41few quarters. So that just goes to show that they have to take a hit on pricing to even have
01:47that
01:47business from XAI. And, you know, right now their visibility is quite low when it comes to the
01:53backlog number that I alluded to. But overall, I think execution is going to be difficult given the,
02:00you know, the person in question here who has been indicted is one of the co-founders. And it's a
02:06pretty
02:06big amount and a very sensitive issue when you think of the geopolitical context.
02:11All right, Mandeep. Really appreciate the context.
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