Introduction
The recent profit and revenue warning from Super Micro Computer has significant implications for the company’s stock performance and market perception. In this article, we take a closer look at what has led to this drastic decline.
Stock Performance
- 17% Loss in After-Hours Trading: The stock plummeted by 17% in after-hours trading after the company drastically lowered its forecasts.
- Repeated Setbacks: As early as February 2025, Super Micro had reduced its revenue outlook, indicating persistent competitive pressure.
Adjusted Forecasts
- Revenue Expectations: Instead of the originally predicted $5–6 billion, a revenue of $4.5–4.6 billion is now expected for Q3 2025 – a decrease of up to 25% from the previous upper estimate.
- EPS: The adjusted earnings per share were cut from 46–62 cents to 29–31 cents – halving the lower end of the expectations.
Causes Analysis
- Delayed Customer Spending: Particularly in investments in AI server infrastructure, there are supply chain delays or budget shifts from customers.
- Increased Competition: The competition with rivals like Dell and HP Enterprise for high-performance computers for AI applications is intensifying margin pressure.
Industry Context
Super Micro is positioning itself as a key supplier of AI hardware components, but it is increasingly dependent on the expansion pace of large cloud providers and tech companies in AI data centers.
Consequences for Investors
- Analyst Target Adjustments: Investment bankers are likely to lower price targets, which could generate further downward pressure.
- Long-term Risks: If spending delays prove to be a structural problem, it could call into question the company’s growth narrative.
This incident underscores the volatility in the tech sector – especially in companies focused on future technologies like AI, where expectations and reality often collide. For investors, this highlights the need for a diversified portfolio to mitigate risk.