Super Micro Computer Stock Plummets 17% on Disappointing Q3 Results
1min read Super Micro Computer, Inc. (SMCI.US) experienced a significant decline in its stock price, falling by 17% to $29.88 on Wednesday. This sharp drop was triggered by the company's preliminary financial results, which fell far short of market expectations. The company's third-quarter revenue was projected to be between $45 billion and $46 billion, which was not only below the analysts' average expectation of $55.3 billion but also significantly lower than the company's previous guidance of approximately $55 billion. This disappointing performance raised concerns among investors, leading to a substantial decrease in the stock price.
The company's underperformance in the third quarter indicates a slow progress in its business recovery plan. As an artificial intelligence (AI) server manufacturer, super micro computer has been riding the wave of the AI boom. However, the recent financial results suggest that the company may be facing challenges in sustaining its growth momentum. The preliminary financial results, released after the market closed on Tuesday, revealed that the company's revenue was far below the expectations of analysts and the company's own projections. This discrepancy has led to a significant drop in the stock price, with the company's shares falling by 17% in the pre-market trading session on Wednesday.
In addition to the revenue shortfall, the company's adjusted earnings per share for the third quarter were projected to be between $0.29 and $0.31, which was significantly lower than the market expectation of $0.53. Super Micro Computer attributed this underperformance to delays in customer platform decisions, which led to some sales being deferred to the fourth quarter. Furthermore, the company's GAAP and non-GAAP gross margins decreased by 220 basis points compared to the second quarter, primarily due to an increase in obsolete inventory and additional costs incurred to accelerate the launch of new products.
Ask Aime: "Super Micro Computer's stock price fell by 17% after reporting lower-than-expected revenue and earnings. What does this mean for investors?"
The company's underperformance in the third quarter has raised concerns about its ability to meet its financial targets. The disappointing financial results have led to a significant drop in the stock price, with the company's shares falling by 17% in the pre-market trading session on Wednesday. This sharp decline in the stock price has raised concerns among investors about the company's ability to sustain its growth momentum in the face of increasing competition in the AI server market. The company's underperformance in the third quarter has also raised questions about its business recovery plan and its ability to meet its financial targets.
