Super Micro's Q3 Warning Sends Ripples Through AI Hardware Sector

Dell Technologies Stock Falls Alongside Super Micro: What's Going On? - Dell Technologies (NYSE:DELL)

Dell Technologies Inc DELL shares are moving lower Wednesday in sympathy with Super Micro Computer Inc SMCI, which reported preliminary results late Tuesday. Here's what you need to know. What Happened: After the market close on Tuesday, Super Micro preannounced expectations for the third quarter due to delayed customer platform decisions that moved sales into the fourth quarter. The company reported soft preliminary results that sent shares tumbling, including expectations for third-quarter revenue of $4.5 billion to $4.6 billion, down from prior guidance of $5 billion to $6 billion. Super Micro also said it expects to report third-quarter adjusted earnings in the range of 29 cents to 31 cents per share, down from prior guidance of 46 cents to 62 cents per share. Super Micro also expects gross margin for the third quarter to be 220 basis points lower than the second quarter, primarily due to "higher inventory reserves resulting from older generation products and expedited costs to enable time-to-market for new products." Check This Out: 'It's Pretty Much Game Over For Nvidia In China,' Says Analyst: Here's Why Why It Matters For DELL: Dell is one of Super Micro's main competitors, specifically in the AI space. Both companies offer high-performance server solutions used in enterprise, cloud and AI workloads. Dell and Super Micro are key NVIDIA Corp NVDA partners, delivering GPU systems for generative AI and machine learning. Both companies take Nvidia's chips, package them into servers and then sell them to AI hyperscalers. Super Micro shares were last down approximately 19%, dragging Dell and Nvidia down with it. Nvidia shares fell about 2% when Super Micro reported preliminary results. Dell shares fell more than 4% on the news and have continued to move lower Wednesday morning. Dell is due to report financial results for the first quarter sometime next month. Analysts currently expect the company to report earnings of $1.67 per share and revenue of $23.11 billion, according to estimates from Benzinga Pro. In the company's prior two quarters, Dell beat earnings estimates, but fell short on revenue. DELL Price Action: Dell shares were down 6.27% at $87.90 at the time of publication Wednesday, according to Benzinga Pro. Photo: Gabriel Pahontu/Shutterstock. DELLDell Technologies Inc$88.35-5.79%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum23.45Growth49.92Quality-Value40.69Price TrendShortMediumLongOverviewNVDANVIDIA Corp$104.96-3.72%SMCISuper Micro Computer Inc$28.89-19.8%Market News and Data brought to you by Benzinga APIs

NVIDIA, Dell fall after-hours after SMCI's Q3 warning By Investing.com

Investing.com - NVIDIA (NASDAQ:NVDA) shares fell 1.7% in after-hours trading on Tuesday after major customer Super Micro Computer Inc (NASDAQ:SMCI) issued preliminary third quarter results well below estimates. Super Micro makes advanced AI servers that include NVIDIA chips. Super Micro said it now expects net sales for the quarter to be $4.5-$4.6 billion, down from its prior view of $5-$6 billion and the consensus of $5.41 billion. The company expects non-GAAP EPS for the quarter to be $0.29-$0.31, down from its prior view of $0.46-$0.52 and the consensus of $0.54. The company said that while new-generation product design wins were "robust", some delayed customer platform decisions moved sales into Q4. Further, the server maker said GAAP and Non-GAAP gross margin for Q3 was 220 basis points lower than Q2 primarily due to higher inventory reserves resulting from older generation products and expedite costs to enable time-to-market for new products. In addition to the weakness in NVIDIA following the update, shares of Super Micro's rival, Dell (NYSE:DELL), fell 4.8% in after-hours trading on Tuesday.