Super Micro Computer Faces Setback as Revenue Forecast Cut Sparks AI Spending Concerns

Super Micro slumps on forecast cut, analysts downplay broader AI demand concerns

April 30 (Reuters) - Super Micro Computer (SMCI.O), opens new tab shares tumbled 15% before the bell on Wednesday after the server maker slashed its revenue forecast, the latest blow to the former AI darling trying to regain investor confidence following late filings and short-seller attacks. The company blamed the cut on delays in purchases from customers, fanning worries that big technology companies were reining in spending on AI infrastructure as the economic outlook worsens and the short-term returns remain uncertain. While several Big Tech firms have reaffirmed their hefty AI spending plans in recent months, analysts say Microsoft (MSFT.O), opens new tab and Amazon.com (AMZN.O), opens new tab have slowed new data center leases as they become cautious about expanding capacity. But several analysts including those at brokerage J.P. Morgan said Super Micro's cut was unlikely to be representative of any industry-wide slowdown in demand or supply constraints. This was "driven by specific customer decisions on platforms which shifted in relation to timing," J.P. Morgan analysts said, while Rosenblatt Securities called them "isolated issues". While Super Micro, seen as a proxy for Nvidia demand, fell sharply, Nvidia (NVDA.O), opens new tab itself slipped just 1.5% in premarket trading and Advanced Micro Devices (AMD.O), opens new tab fell 0.7% - small declines that signaled investors may be shrugging off the warning. AI server rivals Dell (DELL.N), opens new tab and Hewlett Packard Enterprise (HPE.N), opens new tab slid 2.8% and 0.7%, respectively. Some analysts said the cut could deepen investor scrutiny of Super Micro's forecasts, given it had predicted just last month that sales would be around $40 billion in its next fiscal year, almost twice what analysts expect for the current one. With its shares soaring more than triple in value in 2023, the company was one of the biggest winners of the generative AI boom until last year when it had to delay its annual report, lost its auditor and faced short-seller reports from the now-disbanded Hindenburg Research. Last year, its stock rose 7.2%, widely underperforming the benchmark S&P 500 index (.SPX), opens new tab Reporting by Aditya Soni in Bengaluru; Editing by Krishna Chandra Eluri Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Super Micro slumps on forecast cut, analysts downplay broader AI demand concerns

Super Micro shares plunged 15% after it slashed revenue forecasts, citing delayed customer purchases amid economic uncertainty. Analysts view the cut as customer-specific, not industry-wide. The AI server maker faces renewed investor scrutiny following past issues with filings, short-seller attacks, and ambitious growth projections.Super Micro Computer shares tumbled 15% before the bell on Wednesday after the server maker slashed its revenue forecast, the latest blow to the former AI darling trying to regain investor confidence following late filings and short-seller attacks. The company blamed the cut on delays in purchases from customers, fanning worries that big technology companies were reining in spending on AI infrastructure as the economic outlook worsens and the short-term returns remain uncertain. While several Big Tech firms have reaffirmed their hefty AI spending plans in recent months, analysts say Microsoft and Amazon.com have slowed new data center leases as they become cautious about expanding capacity. But several analysts including those at brokerage J.P. Morgan said Super Micro's cut was unlikely to be representative of any industry-wide slowdown in demand or supply constraints. This was "driven by specific customer decisions on platforms which shifted in relation to timing," J.P. Morgan analysts said, while Rosenblatt Securities called them "isolated issues". While Super Micro, seen as a proxy for Nvidia demand, fell sharply, Nvidia itself slipped just 1.5% in premarket trading and Advanced Micro Devices fell 0.7% - small declines that signaled investors may be shrugging off the warning. AI server rivals Dell and Hewlett Packard Enterprise slid 2.8% and 0.7%, respectively. Some analysts said the cut could deepen investor scrutiny of Super Micro's forecasts, given it had predicted just last month that sales would be around $40 billion in its next fiscal year, almost twice what analysts expect for the current one. With its shares soaring more than triple in value in 2023, the company was one of the biggest winners of the generative AI boom until last year when it had to delay its annual report, lost its auditor and faced short-seller reports from the now-disbanded Hindenburg Research. Last year, its stock rose 7.2%, widely underperforming the benchmark S&P 500 index.

Server maker Super Micro fans AI spending worries with cuts to revenue, profit estimates

Investor jitters around AI spending have also heightened as US President Donald Trump's sweeping tariffs on trading partners have sparked fears of a global slowdown. Nvidia shares fell close to 2% in after-hours trading while AMD's stock slipped about 1% following the cuts by a key partner.AI server maker Super Micro Computer on Tuesday cut its third-quarter revenue and profit expectations due to delays in customer spending, amplifying worries of a pullback in AI-linked investments and pushing its shares down 16%. The dour projections come after months of accounting issues had prompted a potential delisting, damaging customer and investor confidence in a company that had emerged as one of the biggest winners of the AI trade. Investor jitters around AI spending have also heightened as US President Donald Trump's sweeping tariffs on trading partners have sparked fears of a global slowdown. Nvidia shares fell close to 2% in after-hours trading while AMD's stock slipped about 1% following the cuts by a key partner. Delayed "customer platform decisions" moved sales into the fourth quarter, Super Micro said, trimming its preliminary revenue expectation for the three months ended March 31 to a range of $4.5 billion to $4.6 billion, from $5 billion to $6 billion earlier. Wall Street has highlighted a potential slowdown in investments in AI infrastructure even as Alphabet and Amazon.com have reaffirmed their ambitious plans. TD Cowen analysts last month said Microsoft had abandoned projects set to use 2 gigawatts of electricity in the last six months due to oversupply. "It is possible that some of the large hyperscaler customers are adjusting their data center plans based on several factors - a weakening economy, tariffs on equipment and delays in the delivery of Nvidia's Blackwell products" said D.A. Davidson analyst Gil Luria. Super Micro had said in February its products featuring Nvidia's latest line of Blackwell chips were in full production. Analysts widely believe that demand for older generation AI chips would persist despite new semiconductor launches given the tight supply of advanced processors. Some analysts pinned the cut from Super Micro to its litany of internal issues. "Super Micro's stumble looks more like self-inflicted wounds than a signal of broader trouble," said Michael Ashley Schulman, chief investment officer of Running Point Capital. "Tariffs may have nudged sentiment, but it's internal missteps - customer spending delays and missed expectations - that kicked the stock down the stairs." Super Micro cut its expectations for adjusted quarterly profit to a range of 29 cents to 31 cents per share, from between 46 cents and 62 cents earlier. It blamed the grim profit figures to higher inventory levels of older products. Shares of rival server maker Dell Technologies were down 4.6% while Hewlett Packard Enterprise fell more than 1.5%. Still, some customers may have chosen to move their business rather than deal with Super Micro's internal problems, potentially helping Dell and HPE win orders, said Blake Anderson, associate portfolio manager at Carson Group. Super Micro will host a conference call on May 6.

SMCI Stock Falls Nearly 5% In Wednesday Pre-Market: What's Going On? - NVIDIA (NASDAQ:NVDA), Super Micro Computer (NASDAQ:SMCI)

Super Micro Computer, Inc. SMCI stock declined 4.98% during the pre-market trading session on Wednesday company's Q3 results failed to meet analyst expectations. What Happened: Super Micro Computer announced its Q3 earnings post the market close. The company's earnings stood at 31 cents per share, falling short of the analyst consensus estimate of 50 cents by 38%. The company's quarterly revenue was $4.6 billion, 15.1% less than the estimated $5.42 billion. The company reported a non-GAAP gross margin of 9.7%, after excluding $7 million in stock-based compensation expenses. Previously, Super Micro Computer had forecasted Q3 revenue between $4.5 billion and $4.6 billion, with adjusted earnings expected to range from 29 to 31 cents per share. Charles Liang, the CEO of Super Micro Computer, noted that some customers had postponed platform decisions during the quarter. He said, "We do expect many of those commitments to land in the June and September quarters, reinforcing my confidence in our ability to meet our long-term targets, however, economic uncertainty and tariff impacts may have a short-term impact." The company's stock fell 4.07% in after-hours trading to $31.60 following the announcement. SEE ALSO: Jeff Bezos Says He 'Won the Lottery' With His Teen Mom -- She Had Him at 17, Took Him to Night School, Then Invested Her $245K Savings In Amazon Get StartedStart Futures Trading Fast -- with a $200 Bonus Join Plus500 today and get up to $200 to start trading real futures. Practice with free paper trading, then jump into live markets with lightning-fast execution, low commissions, and full regulatory protection. Get Started Why It Matters: Despite the disappointing Q3 results, Super Micro Computer has projected a strong Q4 revenue outlook. The company expects Q4 net sales to be between $5.6 billion and $6.4 billion and non-GAAP net income to be 40 cents to 50 cents per diluted share. SMCI also anticipates robust demand for artificial intelligence infrastructure solutions, particularly those powered by Nvidia Corp.'s NVDA Blackwell GPUs. However, the company's stock had suffered an 80% fall from its AI peak, as traders turned wary ahead of the Q3 earnings. The company's future performance will be closely watched in the light of these developments. READ MORE: Nvidia CEO Jensen Huang Says Losing Access To China's Potential $50 Billion AI Market Would Be A 'Tremendous Loss' Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. NVDANVIDIA Corp$113.760.19%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum65.84Growth94.76Quality97.33Value7.17Price TrendShortMediumLongOverviewSMCISuper Micro Computer Inc$31.28-5.04%Market News and Data brought to you by Benzinga APIs

Super Micro Computer (SMCI) Contending With ~$1 Billion Worth Of Revenue Pushout As Its Customers Continue To Evaluate The New Blackwell-Based Offerings

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Super Micro Computer (NASDAQ: SMCI) reported earnings for its fiscal Q3'25 on Tuesday, largely meeting its own heavily watered-down guidance. However, the company's outlook for the June-ending quarter, coupled with a lack of affirmation on the $40 billion FY 2026 revenue figure previously guided to, is predictably taking a toll on the sentiment around the high-momentum stock. As a refresher, Super Micro Computer is one of the leading GPU-as-a-Service players and a prominent retailer of liquid-cooled AI racks. Just a few weeks back, SMCI was generally regarded as one of the best hardware plays, handily outpacing the gains notched by the AI maestro NVIDIA. However, as mentioned earlier, Super Micro Computer's latest earnings have been somewhat deficient, to the detriment of its high-flying stock. To wit, SMCI reported $4.6 billion in revenue for its fiscal Q3 2025, matching its recently issued guidance but failing to outpace the consensus expectation of Wall Street analysts, pegged at $5.05 billion. It was Super Micro Computer's guidance, however, that was generally found anemic. After all, the company now expects to report its fiscal Q4'25 revenue in the range of $5.6 billion to $6.4 billion vs. the $6.81 billion consensus estimate. Moreover, the company now expects to earn FY 2025 revenue of between $21.8 billion and $22.6 billion, constituting a substantial discount to the $23.5 billion consensus estimate. Finally, SMCI has also chosen not to reiterate its previous FY 2026 revenue guidance of $40 billion, citing the uncertainty around tariffs and AI diffusion rules. This brings us to the crux of the matter. Citi has now lowered its price target for Super Micro Computer shares to $37, citing revenue pushouts from "customers awaiting next-generation GPUs [that] will take more than a quarter to resolve, further exacerbating investor concerns on competitive dynamics, GPU allocation, visibility and AI lumpiness." On the bright side, Citi notes: "Management sounds optimistic on revenue trajectory ahead given robust order momentum QTD, GPU technology transition (which typically sees higher level of customization and better margins), next generation DLC (expected to double in volume) solutions and manufacturing ramp in Malaysia." According to Rosenblatt, Super Micro Computer faces revenue realization delays, to the tune of ~$1 billion and precipitated by the ongoing customer evaluations of the next-generation NVIDIA Blackwell GPU platforms. Rosenblatt analyst Kevin Cassidy thinks this revenue from the March-ending quarter will now materialize in the June and September quarters. Interestingly, Needham analyst N. Quinn Bolton has adopted an unequivocally bullish stance on Super Micro Computer's prospects: "We find the valuation to be extremely attractive for a company targeting AI/HPC end markets and at the forefront of liquid-cooled data centers." At the time of writing, Super Micro Computer shares are down 6 percent in pre-market trading. So far this year, however, the stock is still up around 10 percent.

SMCI Issues Strong Q4 Revenue Outlook, Expects Nvidia's Blackwell To Fuel Growth - NVIDIA (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD)

Super Micro Computer Inc. SMCI guided for higher fourth quarter revenue during its earnings call on Tuesday. The company anticipated strong demand for artificial intelligence infrastructure solutions, specifically those powered by Nvidia Corp.'s NVDA Blackwell GPUs. What Happened: Despite reporting third-quarter revenue that fell short of its initial forecast, the company anticipates a significant upswing in the current quarter, projecting net sales in the range of $5.6 billion to $6.4 billion. The company's third-quarter performance saw net revenue reach $4.6 billion, a 19% increase year-over-year but a 19% decrease quarter-over-quarter. This dip, as explained by CEO Charles Liang during the earnings call, was primarily attributed to customers delaying commitments as they evaluated AI platforms based on the current Hopper architecture versus the upcoming Blackwell GPUs. However, Liang expressed strong optimism for the coming quarters. "We expect many of these engagements to materialize in the June and September quarters, strengthening our confidence in meeting our long-term growth targets as we close out this eventful fiscal year," he stated. He further emphasized that Blackwell is now in full volume production, leading to increasing order momentum. The anticipated growth in the fourth quarter is heavily reliant on the ramp-up of Blackwell-based systems. Supermicro highlighted its "first-to-market" advantage with new generation AI products, including air-cooled 10U and liquid-cooled 4U NVIDIA B200 HGX systems, as well as GB200 NVL72 racks. The company has also begun offering solutions featuring AMD's MI-325X GPUs, further broadening its AI portfolio. Looking ahead, SMCI is poised to offer platforms based on NVIDIA's B300 and GB300, and Advanced Micro Devices Inc.'s AMD MI-350 this summer. See Also: Warren Buffett Expresses Disappointment Over Dollar Depreciation: Don't Want To Own Assets In A Currency That Is 'Really Going To Hell' Get StartedStart Futures Trading Fast -- with a $200 Bonus Join Plus500 today and get up to $200 to start trading real futures. Practice with free paper trading, then jump into live markets with lightning-fast execution, low commissions, and full regulatory protection. Get Started Why It Matters: While the near-term macroeconomic environment and tariff uncertainties were acknowledged as potential headwinds, Supermicro's global manufacturing footprint, including expanding facilities in the US, Taiwan, and Malaysia, positions it to navigate these challenges. The company also reported a strong cash flow from operations in Q3 at $627 million and a positive net cash position. SMCI reported quarterly earnings of 31 cents per share, which missed the analyst consensus estimate of 50 cents by 38%. Quarterly revenue came in at $4.6 billion, which missed the analyst consensus estimate of $5.42 billion by 15.1%. Shares ended 2.39% higher on Tuesday and fell by 4.77% in after-hours. It has gained 9.62% on a year-to-date basis and fallen 59.79% over a year. Benzinga Edge Stock Rankings shows that SMCI had a weak price trend over the short, medium, and long term. Its momentum ranking was weak at 29.32th percentile, whereas its value ranking was good at 72.94th percentile; the details of other metrics are available here. Read Next: Cathie Wood Bucks Consensus, Predicts Economic Boom And Broad Bull Market: 'The Opportunity Is Now' Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: CryptoFX / Shutterstock.com AMDAdvanced Micro Devices Inc$100.752.16%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum16.47Growth66.65Quality85.77Value15.19Price TrendShortMediumLongOverviewNVDANVIDIA Corp$114.050.45%SMCISuper Micro Computer Inc$31.29-5.01%Market News and Data brought to you by Benzinga APIs

Here's Why I'm Staying Away from Super Micro Stock | The Motley Fool

Artificial intelligence (AI) server manufacturer Super Micro Computer (SMCI -11.53%) regained compliance with the Nasdaq exchange earlier this year by filing its outstanding quarterly and annual financial reports. The company delayed filing its annual 10-K report last year due to issues with internal controls. This type of delay is never good news for investors, but Supermicro was able to remove a big cloud hanging over the stock. Unfortunately, the company now has a new problem. Supermicro reported preliminary results for its fiscal third quarter on Tuesday, and the figures were a gut punch for investors. The company slashed its revenue outlook to a range of $4.5 billion to $4.6 billion, down from prior guidance of $5 billion to $6 billion. Adjusted earnings per share also got a haircut, with a new guidance range of $0.29 to $0.31, landing well below the previous range of $0.46 to $0.62. Supermicro didn't provide many details with its preliminary results, but it did say some customers delayed purchasing decisions in the third quarter. Those delays pushed sales back into the fourth quarter, leading to a revenue shortfall. The company also disclosed that its gross margin would be about 220 basis points lower in the third quarter compared to the second quarter. The decline is driven by higher inventory reserves -- essentially writing off inventory that will either never sell or will sell at a big discount -- and costs related to expediting new products. One silver lining is that Supermicro claims that design wins for newer products are robust. However, the company provided no hard numbers to back that up. Supermicro also didn't provide a date for its full third-quarter results. Generative AI has real use cases. The trillion-dollar question, though, is whether the technology has enough use cases, and can generate enough revenue or cost savings for businesses, to justify the massive AI data center investments being made around the world. Earlier this year, Microsoft laid out a plan to spend $80 billion this year on AI data centers. The Stargate Project, a collaboration between OpenAI and other companies, intends to invest $500 billion over the next four years to build AI infrastructure. Other U.S. tech giants, including Amazon and Meta Platforms, are pouring tens of billions of dollars into AI data centers as well. The net result is an explosion of planned spending that would keep demand for AI accelerators and AI servers growing. Based on Supermicro's stock performance since shares peaked in early 2024, the market just doesn't believe that story. Supermicro stock is down about 74%, and the company's market capitalization has plunged to roughly $18 billion. That gives the stock a price-to-sales ratio below 1 based on analyst estimates for fiscal 2025 sales, a pessimistic valuation, to say the least. That pessimism may be warranted. Supermicro's steep guidance cut is just one of multiple signals that red-hot demand for AI infrastructure could be cooling. In China, there's reportedly an oversupply of AI computing capacity following a frantic building boom. DeepSeek's efficient, cost-effective AI models, which require a fraction of the computing resources of top-tier AI models, have raised questions about how much AI computing capacity will actually be needed. Microsoft and Amazon are now reportedly pulling back on some data center leases. While both companies are still expanding their AI computing capacity, economic uncertainty could be driving them to become more cautious about spending. Add to those developments Supermicro's customer purchasing delays and inventory write-downs, and it's hard not to conclude that demand for AI infrastructure may not be as rock solid as it appeared to be a few months ago. There's a chance AI infrastructure is being overbuilt in the U.S., and the hangover from that overbuilding could cause demand for AI accelerators and AI servers to temporarily implode. That implosion may already be starting, given Supermicro's preliminary results, although it's hard to tell. Supermicro stock looks like a bargain if you assume demand for AI servers will continue to rise going forward. If that's not the case, though, the stock could fall further as sales contract. With so much uncertainty surrounding Supermicro, I'll be staying away from the stock.

Supermicro Stock Is Soaring Today. Should You Buy The Hot AI Stock Before May 6? | The Motley Fool

Shares of Super Micro Computer (SMCI 5.40%) are rising on Thursday. The company's stock gained 4.9% as of 2:11 p.m. ET and had gained as much as 5.2% earlier in the day. The leg up comes as the S&P 500 gained 1% and the Nasdaq Composite gained 2% on the day. A day after dropping nearly 20%, the AI server company's stock is rising after Microsoft and Meta Platforms reiterated in their Wednesday earnings calls that artificial intelligence (AI) spending was continuing apace. Microsoft confirmed yesterday it's on track to spend $80 billion in capital expenditures (capex) while Meta raised its capex forecast for the year by as much as $7 billion, now expecting to spend between $64 billion and $72 billion. The vast majority of these spends will be targeted toward AI infrastructure. The revelation that AI spending from some of the biggest companies in tech would not slow down was a breath of fresh air for much of the industry. Supermicro had released preliminary numbers ahead of its earnings call on May 6 that spooked investors, leading to yesterday's 20% drop in the stock price. The positive reports from Microsoft and Meta served as a counterbalance to Supermicro's preliminary numbers, buoying investor sentiment. Still, while the continued spending from tech giants is good news for the industry as a whole, Supermicro's own numbers were damning. The company expects to report $0.29 to $0.31 in earnings per share (EPS), which is well off Wall Street's target of $0.54. This comes at a time when the company is mired in controversy surrounding its accounting practices and the high-profile resignation of its auditor, Ernst & Young. I would stay away from Supermicro stock.

Why Super Micro Computer Stock Is Plummeting This Week | The Motley Fool

After the market closed on Tuesday, Supermicro published preliminary results for the third quarter of its 2025 fiscal year -- which ended March 31. The company issued substantial downward performance revisions, and investors sold out of the stock in response. Supermicro is scheduled to report its fiscal Q3 results after the market closes on May 6, but the company updated investors on what to expect earlier this week. It now expects revenue to come in between $4.5 billion and $4.6 billion. Previously, the company had guided for sales to be between $5 billion and $6 billion in the period. Management also now expects non-GAAP (adjusted) earnings per share for the period to be between $0.29 and $0.31 -- down from its previous guidance for earnings per share between $0.46 and $0.62. Supermicro's Q3 guidance update this week raised questions about whether demand for artificial intelligence (AI) servers is weakening. On the other hand, the company attributed its big downward guidance revisions to customer orders being pushed further out. Shipment delays for the Nvidia Blackwell processors that are at the heart of Supermicro's newest servers may have played a major role in the disappointing Q3 guidance. Strong quarterly reports and capital expenditures updates from Microsoft and Meta Platforms earlier this week suggest that AI infrastructure spending remains high, and it's possible that Supermicro will wind up seeing very strong sales in the current quarter following delayed orders in Q3. Investors should get a closer look at the outlook when the company publishes its fiscal Q3 results next week.

Is Super Micro Computer Stock a Buy Now?

This company was once a high-flying hero of the early artificial intelligence (AI) boom, but shares of Super Micro Computer (SMCI 2.67%) have become the antagonist in investor portfolios. The latest setback came as the tech giant slashed guidance ahead of final fiscal third-quarter results (for the period ended March 31, 2025). The stock is now down approximately 63% over the past year amid a major reset of expectations. Nevertheless, it may not be the end of the line for this industry leader. Super Micro Computer continues to generate profitable growth, which keeps the potential open for shares to rebound. Let's discuss whether Super Micro Computer stock is a buy right now. A whirlwind rise and fall Few companies have experienced the roller-coaster trajectory that Super Micro Computer has in recent years. From just a little-known U.S.-based manufacturer of enterprise data servers, the company has gained prominence by capitalizing on demand for high-performance computers that are now critical components of AI infrastructure. These specialized rack-scale systems integrate power, storage, cooling, and software components to support graphics processing unit (GPU)-based AI chips from Nvidia. Indeed, sales have more than quadrupled since 2020, reaching $21 billion in the last 12 months. Even with the recent stock price plunge, shares of Super Micro Computer have still returned more than 1,400% over the past five years. That being said, this meteoric rise has been overshadowed by several controversies. In 2024, Super Micro Computer faced an accounting investigation by the U.S. Department of Justice (DOJ), prompting concerns that the stock could be delisted. While an independent special committee has since cleared the company of misconduct allegations, and an audited 2024 annual report has resolved some of those serious uncertainties, it's clear that more time will be necessary to rebuild investor confidence. Mixed trends in 2025 Super Micro Computer recently provided investors with a business update, announcing preliminary third-quarter financial results. Unfortunately, the projections are well below expectations. The company cut its targeted revenue to a range of $4.5 billion to $4.6 billion, down from the prior $5 billion to $6 billion estimate. Similarly, Super Micro now sees the third-quarter adjusted earnings per share (EPS) between $0.29 and $0.31, compared to the $0.46 to $0.62 forecast previously. Comments by management noted "delayed customer platform decisions," but reaffirmed the traction, particularly in its new generation of products. An investor conference call scheduled for May 6 should provide further details. While the headline numbers don't inspire much confidence, there's a case to be made that the big picture for Super Micro Computer is positive. If the Q3 estimates are confirmed, at the midpoint, they still represent a solid 18% year-over-year increase in sales. EPS has been volatile as the company invests to expand production capacity, but reflects sharply higher operating income compared to levels two years ago. Super Micro Computer is no longer a hyper-growth stock, but it still stands to capitalize on a long-term opportunity to expand. Analysts at Goldman Sachs forecast that global power demand from data centers will increase by as much as 165% by the end of the decade, compared to 2023, as AI workloads surge. That's great news for Super Micro Computer, which benefits from its technical leadership in direct-liquid cooling (DLC) for server power management systems, a technology that delivers significant efficiency benefits and cost savings for energy-intensive data centers. Super Micro expects more than 30% of new developments worldwide to adopt liquid-cooled infrastructure this year. By this measure, the allure of Super Micro Computer as an investment today is its specialization in these high-performance systems, with room to consolidate market share gains over competitors like Dell Technologies and International Business Machines. Still a comeback story The rest of 2025 will be pivotal for Super Micro Computer to demonstrate that its Q3 weakness is temporary and that it can move past the corporate challenges that defined 2024. I expect the stock to remain volatile. Still, Super Micro has enough strong points in its outlook for shareholders to stick with the stock. For long-term investors confident in an eventual turnaround, this deep sell-off in the stock could be a good spot to start building a small position in a diversified portfolio.

Super Micro Computer Stock Plunges. Is This a Buying Opportunity? | The Motley Fool

One of the most volatile stocks over the past year or so, Super Micro Computer (SMCI 2.87%) continued its habit of making big moves after its shares tumbled following the company's pre-announcement of poor fiscal Q3 earnings results. The stock has lost about two-thirds of its value over the past year. The stock has been on a crazy roller-coaster ride ever since a short report came out questioning the company's accounting and accusing it of other misdeeds. The delay of its annual report, a reported investigation into the company by the Department of Justice, and the resignation of its auditor only added to the intrigue. However, the company is now current with its filings and reporting full results, but it just looks like they will be disappointing. Below, I'll take a closer look at Supermicro's announcement to see if this could be a buying opportunity in the stock. For those unfamiliar with Supermico, it's a hardware integrator that designs and assembles servers and rack solutions, which are fully configured systems that include networking, cooling, and power built in. It was one of the first companies in the space to offer direct liquid cooling (DLC) in its setups. Server hardware generates a lot of heat, especially when running artificial intelligence (AI) workloads, and DLC offers some nice advantages over traditional air cooling. The company tends to build and customize its systems around Nvidia's graphics processing units (GPUs), and it's a key original equipment manufacturer (OEM) partner of the chipmaker. As such, it has benefited nicely from the artificial intelligence (AI) infrastructure buildout. However, since the company is essentially a middleman integrator, its business has low gross margin. Despite the customization that it offers, it's in a commoditized field with low differentiation and intense competition. Meanwhile, it's passing on very expensive component costs, such as GPUs, that inflate revenue but don't add much to gross profit. While Supermicro is in a notoriously slim gross margin business, it still has seen pressure on this front. This began showing up in its fiscal Q4 ending in June 2024 when its gross margin plunged from 17% a year ago to 11.3%. At the time, the company said that it had reduced prices in the pursuit of new design wins. For fiscal Q2, its adjusted gross margin remained strained, coming in at 11.9%. For the company's most recent quarter, the gross margin problems didn't go away. In fact, they got worse. Supermicro said its gross margin would be 220 basis points lower than fiscal Q2, which would drop it to only 9.7%. This stemmed from the company taking increased inventory reserves on older-generation products and then rushing newer-generation products to customers. Supermicro added that customers were delaying platform decisions, which moved sales into its fiscal Q4. As a result, it lowered its fiscal Q3 revenue forecast from a range of $5 billion to $6 billion to a new range of $4.5 billion to $4.6 billion. It also lowered its adjusted earnings per share (EPS) forecast, taking it from $0.46 to $0.62 to $0.29 to $0.31. A year ago, the company reported adjusted EPS of $0.66 (split adjusted) on revenue of $3.85 billion. So sales growth would be 18%, while its EPS looks poised to decline. Source: Company press release At the heart of Supermicro's problems appears to be customers transitioning to Nvidia's new Blackwell chip. Blackwell remains capacity-constrained, but it appears customers are now more willing to wait for Nvidia's newest chip architecture than buy servers powered by older Hopper chips. This could lead to Hopper inventory piling up and future discounting. This could be temporary in nature, but with Nvidia speeding up its new chip designs to about once every year, this dynamic could become a more common occurrence. Supermicro will have to learn to better manage its supply chain to more closely match inventory and demand in the future during these chip design transition periods. With a forward price-to-earnings ratio (P/E) of under 12x this fiscal year's analyst estimates, Supermicro shares aren't expensive. However, given its low gross margin and the commoditized nature of its business, the company hasn't historically commanded a large valuation multiple. Supermicro is still set up to benefit from the AI infrastructure buildout, but it's going to have to manage its current inventory and margin issues. Meanwhile, the stock is still carrying some baggage related to its short accusations and filing delay. There are a lot of AI stocks on sale, given the recent market volatility. I think there are better ways to play the AI infrastructure boom.

Super Micro's Q3: Down But Not Out, This AI Phoenix Should Rise (SMCI)

Reiterating "buy": Recent sell-off overlooks SMCI's robust Q4 guidance, Blackwell ramp, and long-term AI leadership, presenting a compelling undervaluation opportunity for investors. Introduction Back in early March, I published my bullish upgrade on Super Micro Computer, Inc. (NASDAQ:SMCI) stock (from "Hold" to "Buy"), expecting that SMCI should keep reversing massively in the span of the next few weeks as its Struggle to access the latest reports from banks and hedge funds? With just one subscription to Beyond the Wall Investing, you can save thousands of dollars a year on equity research reports from banks. You'll keep your finger on the pulse and have access to the latest and highest-quality analysis of this type of information. Oakoff Investments is a personal portfolio manager and a quantitative research analyst with 5 years helping readers find a reasonable balance between growth and value by sharing proprietary Wall Street information. He leads the investing group Beyond the Wall Investing with features that include: a fundamentals-based portfolio, weekly analysis on insights from institutional investors, regular alerts for short-term trade ideas based on technical signals, ticker feedback by request from readers, and community chat. Learn more. Analyst's Disclosure: I/we have a beneficial long position in the shares of SMCI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Super Micro's preliminary results show pressure on Q3 sales, Kuo says By Investing.com

Investing.com -- Analyst Ming-Chi Kuo from TF International Securities commented today on Super Micro's (NASDAQ:SMCI) preliminary results, indicating that the company's quarterly numbers are likely to remain under pressure. Super Micro's business primarily revolves around AI servers, which are divided into three main types: ASICs, such as Google (NASDAQ:GOOGL) TPU servers, Nvidia's GB200/300 NVL72, and lower-end Nvidia (NASDAQ:NVDA) servers like the HGX series. The growth in this sector is mainly driven by ASICs and NVL72, predominantly from CSP (LON:CSPC) demand. In the first half of 2025, Super Micro's shipments will be focused on Nvidia's lower-end servers. The company's key customers are not CSPs, and as Kuo previously noted, Super Micro is not a top-tier NVL72 assembler. Because of this, the company's preliminary results do not reflect the overall trends in the AI server industry. Their product mix and customer base aren't representative of the industry as a whole. However, the weak results are expected to impact the short-term sentiment in the AI server supply chain. Super Micro has mentioned delays in purchasing, which Kuo believes are likely due to the transition from HGX Hopper to Blackwell. Additionally, a potential delay in purchasing could hit this quarter due to the shift from B200 to B300. The company also noted an increase in older GPU inventory, which likely refers to the Hopper series. Geopolitical factors could slow down Super Micro's Hopper shipments, negatively affecting this quarter's results, unless there is a significant increase in Blackwell shipments. Super Micro yesterday revised its net sales expectations for the quarter to $4.5-$4.6 billion, a decrease from its previous estimate of $5-$6 billion and the consensus of $5.41 billion. It also lowered its non-GAAP EPS for the quarter to $0.29-$0.31, down from its prior view of $0.46-$0.52 and the consensus of $0.54. Despite the company reporting "robust" new-generation product design wins, some delayed customer platform decisions have pushed sales into Q4. The server maker also stated that Q3's GAAP and Non-GAAP gross margin was 220 basis points lower than Q2, mainly due to higher inventory reserves from older generation products and expedite costs to bring new products to market faster.

Super Micro Q3 2025 presentation: Mixed results as AI strategy advances By Investing.com

Super Micro Computer Inc. (NASDAQ:SMCI) presented its fiscal third quarter 2025 results on May 6, revealing a mixed financial performance while emphasizing its strategic focus on AI infrastructure and manufacturing expansion. The company reported year-over-year revenue growth but experienced sequential declines and margin pressure amid a challenging market environment. The presentation comes as Super Micro continues to position itself as a leading provider of AI infrastructure solutions, with AI GPU platforms accounting for over 70% of its revenues according to the earnings call. Despite beating earnings expectations with a non-GAAP EPS of $0.31 versus the forecast of $0.30, the company's revenue of $4.6 billion fell short of the expected $5.05 billion, resulting in a 4.77% decline in after-hours trading. Quarterly Performance Highlights Super Micro reported revenue of $4.6 billion for Q3 FY2025, representing a 19% increase year-over-year but a 19% decrease quarter-over-quarter. The company's non-GAAP gross margin stood at 9.7%, down 220 basis points sequentially and 590 basis points year-over-year, reflecting significant margin pressure. As shown in the following financial highlights slide, non-GAAP earnings per share came in at $0.31, down from $0.59 in the same quarter last year and $0.59 in the previous quarter: The company generated $627 million in cash flow from operations during the quarter, demonstrating its ability to maintain positive cash generation despite the challenging environment. Server and storage systems accounted for $4,459 million of total revenue (down 19% QoQ, up 21% YoY), while subsystems and accessories contributed $141 million (down 26% QoQ, down 7% YoY). Strategic Initiatives Super Micro's presentation highlighted several key strategic initiatives centered around AI infrastructure leadership and manufacturing expansion. The company emphasized its first-to-market advantage with next-generation AI products, including being the first to ship the latest NVIDIA (NASDAQ:NVDA) B200/GB200 solutions. The CEO's key takeaways slide underscores the company's focus on AI performance leadership and product innovation: A significant portion of Super Micro's strategy involves expanding its liquid cooling solutions, which the company expects to account for over 30% of new datacenter deployments. This focus aligns with the increasing power requirements of AI systems and the need for more efficient cooling solutions. As illustrated in the following slide, Super Micro has achieved impressive production capacity with 5,000 racks per month, including 2,000+ direct liquid cooling (DLC) racks: The company's manufacturing expansion represents another key strategic initiative. Super Micro is enhancing its global footprint with facilities in Silicon Valley, APAC, and Malaysia to meet growing demand and optimize costs: Super Micro's growth trajectory compared to the broader IT industry demonstrates its successful evolution from a components provider to a total IT solutions company: Forward-Looking Statements Looking ahead, Super Micro provided guidance for Q4 FY2025, projecting revenue between $5.6 billion and $6.4 billion, with non-GAAP diluted EPS expected to range from $0.40 to $0.50. For the full fiscal year 2025, the company anticipates revenue between $21.8 billion and $22.6 billion. The following slide details the company's revenue and EPS outlook: During the earnings call, CEO Charles Liang expressed confidence in the company's growth prospects, stating, "We remain very confident with our midterm and long-term growth." He also highlighted advancements in their liquid cooling technology, noting that their second-generation DLC is outperforming the first generation. However, the company faces several challenges, including macroeconomic uncertainties, potential delays in customer decisions due to technology platform transitions, and tariff impacts that could affect cost structures and pricing. The revenue guidance for Q4 suggests a potential recovery from the Q3 slowdown, though market reception remains cautious as evidenced by the after-hours stock decline. Super Micro's emphasis on being a US-based manufacturer could provide advantages amid ongoing global supply chain challenges and increasing focus on domestic production of critical technologies. As the company continues to navigate the competitive AI infrastructure landscape, its ability to maintain technological leadership while addressing margin pressures will be crucial for long-term success. Full presentation:

Super Micro slumps on forecast cut, analysts downplay broader AI demand concerns

(Reuters) -Super Micro Computer shares tumbled 15% before the bell on Wednesday after the server maker slashed its revenue forecast, the latest blow to the former AI darling trying to regain investor confidence following late filings and short-seller attacks. The company blamed the cut on delays in purchases from customers, fanning worries that big technology companies were reining in spending on AI infrastructure as the economic outlook worsens and the short-term returns remain uncertain. While several Big Tech firms have reaffirmed their hefty AI spending plans in recent months, analysts say Microsoft and Amazon.com have slowed new data center leases as they become cautious about expanding capacity. But several analysts including those at brokerage J.P. Morgan said Super Micro's cut was unlikely to be representative of any industry-wide slowdown in demand or supply constraints. This was "driven by specific customer decisions on platforms which shifted in relation to timing," J.P. Morgan analysts said, while Rosenblatt Securities called them "isolated issues". While Super Micro, seen as a proxy for Nvidia demand, fell sharply, Nvidia itself slipped just 1.5% in premarket trading and Advanced Micro Devices fell 0.7% - small declines that signaled investors may be shrugging off the warning. AI server rivals Dell and Hewlett Packard Enterprise slid 2.8% and 0.7%, respectively. Some analysts said the cut could deepen investor scrutiny of Super Micro's forecasts, given it had predicted just last month that sales would be around $40 billion in its next fiscal year, almost twice what analysts expect for the current one. With its shares soaring more than triple in value in 2023, the company was one of the biggest winners of the generative AI boom until last year when it had to delay its annual report, lost its auditor and faced short-seller reports from the now-disbanded Hindenburg Research. Last year, its stock rose 7.2%, widely underperforming the benchmark S&P 500 index (Reporting by Aditya Soni in Bengaluru; Editing by Krishna Chandra Eluri)