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Nvidia's Latest Move Just Gave Supermicro Investors Some Epically Bad News

Clyde MorganSunday, Nov 10, 2024 12:26 pm ET
2min read

Nvidia's recent decision to shift Supermicro orders to other vendors has sent shockwaves through the AI server market, with significant implications for both companies and their investors. Supermicro, a leading equipment maker, has been grappling with recent troubles, including a delayed 10-K filing, potential delisting, and the resignation of its auditor. Nvidia, on the other hand, has been enjoying high demand for its graphics processing units (GPUs) and related products and services. However, the chipmaker's latest move may have just given Supermicro investors some epically bad news.
Nvidia's decision to shift Supermicro orders to other vendors, as reported by DigiTimes Asia, could minimize near-term impact on its sales and keep the supply chain flowing. However, this move may have significant long-term implications for Supermicro's market share and competitive position. The shift could lead to a reduction in Supermicro's order volume, potentially impacting its revenue and market share in the near term. If Nvidia decides to permanently shift its orders to other vendors, Supermicro's competitive position could be weakened, potentially opening the door for competitors to gain market share.
The potential long-term impact of Nvidia's move on Supermicro's market share and competitive position is a major concern for Supermicro investors. The company's reliance on Nvidia's GPUs for its server systems and the high demand for Nvidia's Blackwell architecture could lead to supply chain disruptions and impact Supermicro's sales. This shift may also make it more difficult for Supermicro to increase borrowing to fund orders, potentially impacting its working capital and financial stability.

Nvidia's recent move could have significant implications for other AI server providers as well. While Supermicro's woes might not immediately translate to financial benefits for competitors like Dell Technologies, industry contacts suggest that customers are paying closer attention to the situation. This could start helping Dell in terms of pipeline, backlog, and ultimately, sales next year. The shift could also impact margins and pricing power in the AI server market, potentially benefiting Dell. However, it's important to note that Dell hasn't quantified these potential benefits yet.

Nvidia's decision to shift Supermicro orders to other vendors could also have significant implications for its supply chain and customer relationships. This proactive step minimizes potential impact on Nvidia's sales and keeps the supply chain flowing, but it may lead to near-term effects. Supermicro is a leading equipment maker, and considering the high demand for Nvidia's new Blackwell architecture, every player involved in bringing it to customers holds a key role. If Supermicro's issues persist, Nvidia may face challenges in maintaining its supply chain and customer relationships, potentially impacting its revenue and order deliveries in the short term. However, Nvidia's diverse range of partners and customers should help mitigate these risks in the long term.
In conclusion, Nvidia's recent decision to shift Supermicro orders to other vendors has raised serious concerns for Supermicro investors. The potential long-term impact on Supermicro's market share and competitive position, as well as the implications for Nvidia's supply chain and customer relationships, are significant. As the situation unfolds, investors should closely monitor the developments and reassess their positions accordingly.
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sniper459
11/10
$SMCI has a p/e ratio of 12.31, with revenue projected at $5B per quarter and positive EPS and FCF. It's hard to resist the appeal of this......
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WoodKite
11/10
$SMCI can we replicate the short squeeze seen in HKD or GME here? That would be cool.
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pais_tropical
11/10
$SMCI Shorting this stock from now on is a surefire way to destroy those dollars! They'll be burned and dissolved quickly, so be cautious!
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AdvantageNo3180
11/10
$SMCI is a company that has made its mark in every sector of the AI industry. AI is still in its early stages, but $SMCI has repeatedly set the bar high. This trend will continue, and $SMCI will once again demonstrate its prowess in the AI field.
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WoodKite
11/10
By the end of next week, we expect $SMCI to trade between $26.7 and $32. With positive news, we aim for it to reach $50 by mid-December.
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stydolph
11/10
$SMCI The 10k report is crucial. If they submit a compliance plan to Nasdaq, the likelihood of delisting drops, and the likelihood of filing climbs, which will drive changes in the stock price.
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Fountainheadusa
11/10
$SMCI once-in-a-lifetime opportunity! With any bit of good news, be it positive or negative, this stock seems to respond in kind.
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BloodForThCursedIdol
11/10
Micron Tech is taking off! Micron's PEG ratio is huge - like, really huge - at about 225. That means their stock might be way overvalued. There's also a major discrepancy between their ESP (0.71) and P/E (~ 160). When that happens, stock prices can get wild, like we've seen in the past. But here's the deal: I think Micron's stock is going up. Why? Because there's strong demand for their products. And as long as Nvidia keeps performing well, I don't see any reason for Micron not to keep riding high. Of course, this is my own opinion and you should always do your own research and consult with a financial expert before making any investment decisions.
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goodpointbadpoint
11/10
$SMCI Check this out! It’s all you need to know.
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Sophia Clarke
11/10
$SMCI If they're capable of creating the world's top AI infrastructure...don't you think they're intelligent enough to devise a strategy to file a plan with Nasdaq? I'm in.
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yodalr
11/10
$SMCI Zone 42-45 is on its way!
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goodpointbadpoint
11/10
$SMCI I'm not the least bit concerned. I'm fully loaded and ready to go. Bought some shares this past week! Keep a close eye on those highly dramatic posts by the Bears — they're either bots or consistently losing traders. I, on the other hand, am cool, happy, confident, and patient — all characteristics of successful investors. $SMCI presents a golden opportunity! Kudos to all you astute Bulls out there! May your trading and investing careers be abundantly rewarded.
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lookingforfinaltix
11/10
$SMCI It's likely that the company will file a compliance plan for an extension with Nasdaq, with the probability being over 50%, right?
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cyarui
11/10
$SMCI Hey fundies, you've really stepped up your game during this downturn, accumulating 84% (from 52%) of the shares. You've successfully cornered a massive short position of 150 million shares. Now that the setup is complete, it's time to kick off the festivities! Check out the institutional ownership here: https://www.marketbeat.com/stocks/NASDAQ/SMCI/institutional-ownership/
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Argothaught
11/10
$NVDA I'm confused. With a massive company like this, how can its stock be valued so low despite their earnings? It seems ridiculous to think that $300 isn't a fair price for $NVDA. Just look at Tesla's stock, and you'll see what I mean.
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