Super Micro Computer Stock Plummets 22.6% on Disappointing Earnings

Super Micro Computer, Inc. (SMCI) experienced a significant decline in its stock price on Wednesday, driven by disappointing financial results for the fourth quarter of its 2025 fiscal year. The company reported adjusted earnings per share of $0.41, down from $0.54 in the previous year, and below the consensus estimate of $0.54. Revenue grew 7.5% year-over-year to $5.76 billion, but also fell short of expectations.

The company attributed the shortfall to increased costs due to tariffs and operational expenses. Additionally, the company's CEO mentioned that revenue was impacted by funding constraints that limited the company's ability to rapidly expand production, as well as a major new customer's request for specification changes, which delayed revenue recognition due to additional features.

Operating expenses surged 22.6% to $315.7 million, primarily due to increased compensation costs and a higher headcount. The company also provided a weaker-than-expected outlook for the first quarter of 2026, with adjusted earnings per share expected to be between $0.40 and $0.52, compared to the consensus estimate of $0.60.

The decline in Super Micro Computer's stock price reflects broader market concerns about the performance of technology companies and the impact of geopolitical tensions. Despite some positive aspects, the overall market reaction was driven by the underperformance relative to high market expectations and short-term challenges faced by these companies.