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Super Micro Computer's Star Dims as Q3 Results Shock Investors

Word on the StreetWednesday, Apr 30, 2025 2:01 am ET
1min read

On April 29th, following the close of markets, super micro computer (SMCI.US) unveiled its preliminary third-quarter financial results for fiscal year 2025, sparking widespread investor concern due to their disappointing nature.

The company's projection for third-quarter sales stood at $4.5 billion to $4.6 billion—falling short of both the previous guidance of $5 billion to $6 billion and investor expectations. Similarly, adjusted earnings per share were estimated between $0.29 and $0.31, significantly below expectations as well.

Ask Aime: What's driving Super Micro Computer's disappointing Q3 results?

Super Micro Computer attributed some of its third-quarter challenges to delays in customer platform decisions, resulting in the postponement of certain sales to the fourth quarter. Moreover, both GAAP and non-GAAP gross margins decreased by 220 basis points from the second quarter, primarily due to increased inventory of outdated products and additional costs incurred to expedite new product launches.

These unfavorable announcements triggered a dramatic plunge in Super Micro Computer’s stock price, with a 15% drop in post-market trading, warranting attention within the industry. During the recent AI boom, tech stocks like nvidia (NVDA.US) and TSMC (TSM.US) have surged, and Super Micro Computer, by virtue of its sales of servers equipped with Nvidia chips, has also shone as a "star stock." Its stock performance even surpassed Nvidia’s at one point.

Earlier in February, Super Micro Computer provided an optimistic long-term revenue outlook. Founder, President, and CEO Charles Liang expressed confidence in the company's capability for expanding its leadership as a primary data center infrastructure solution provider in the U.S., foreseeing revenue between $23.5 billion and $25 billion for fiscal 2025, paving the way for $40 billion in 2026, significantly exceeding analyst expectations.

However, in a mere few months, the preliminary results fell markedly short of those hopeful projections, offering investors a cold reality check. Concurrently, reports emerged about companies like Microsoft and Amazon pausing data center construction, potentially due to overinvestment in AI computational capacity, amplifying investor unease further.

These developments, unfolding during a turbulent period for U.S. stocks under Trump's tariff policies, might have a reverberating effect across other tech stocks. Super Micro Computer's disappointing earnings may contribute to a broader negative stock performance within the sector, as it signals potential vulnerabilities amidst the AI frenzy.

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taliskergunn
04/30
$SMCI bought more PM. Now holding 1600 shares at 36
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curiouscuriel
04/30
@taliskergunn I had $SMCI once, sold too early. Regretting now, FOMO is real.
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ultimategodemperor
04/30
@taliskergunn How long you holding $SMCI? Think it's a long-term play?
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Reisyz97
04/30
$SMCI not selling above 50+ will stay with me forever 😂
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No-Explanation7351
04/30
$SMCI overreaction
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Rm.r
04/30

I made over 150k here with an expert’s help and recommendation 🤗

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Rm.r
04/30
@Rm.r

She’s great connect 🇺🇸+.𝟣𝟧𝟨𝟥𝟤𝟩𝟫𝟪𝟦𝟪𝟩

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fluffnstuff1
04/30
@Rm.r How long were you holding before selling? Any specific stocks or strategy you'd recommend?
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RubiksPoint
04/30
@Rm.r I had a chance to buy SMCI last year, but I hesitated. Now I'm regretting my FOMO.
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SmallVegetable4365
04/30
Microsoft and Amazon pausing data centers? Overcapacity vibes. Makes me rethink my $MSFT position. 🤔
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notbutterface
04/30
Holding $SMCI, waiting for a bounce back opportunity.
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1kczulrahyebb
04/30
Trump tariffs causing turbulence. Not new news, but they still hurt. SMCI needs stable policies to thrive.
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James1997lol
04/30
AI hype feels like a house of cards now.
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that_is_curious
04/30
SMCI's margins tanked, time to rethink strategies 🤔
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k_ristovski
04/30
SMCI's earnings tank, but holding long-term. Data center boom ain't over. Patience pays in this wild ride.
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car12703
04/30
SMCI's margins tanked. Outdated inventory is a drag. Gotta keep an eye on how they handle this mess.
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Jimmorz
04/30
15% drop? Ouch. But hey, buying the dip might be smart if they rebound. Anyone else loading up?
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Really_Schruted_It
04/30
SMCI's guidance was super optimistic. Rookie move underestimating challenges. Management better tighten up.
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Charming_Raccoon4361
04/30
What's up with SMCI? Seems like they can't catch a break. Tariffs, inventory issues... not a great combo.
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Haardikkk
04/30
Damn!!The SMCI stock generated the signal, from which I have benefited significantly!
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PuzzleheadedRadish9
04/30
@Haardikkk How long you held SMCI? What's your prediction for its recovery?
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