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Super Micro Computer Stock Plunges Amid Tariff Uncertainty

AinvestFriday, Apr 11, 2025 11:39 pm ET
1min read

Super Micro Computer's stock dropped 5.9% after yesterday's 15.8% gain, as investors worry about the future of its business. The company has faced accounting issues, risk of delisted shares, and reduced guidance for fiscal 2025 sales. The exemption for semiconductors from Trump's tariff plan may not last, potentially impacting its customers and sales estimates. Management plans to expand its global manufacturing footprint, which could boost profitability.

Super Micro Computer (SMCI) experienced a significant swing in its stock price yesterday, soaring by 15.8% following President Donald Trump's pause in the implementation of his global tariff plan. The stock, which makes high-end, liquid-cooled artificial intelligence (AI) servers, benefited from the temporary reduction in tariffs that would have impacted its overseas manufacturing capacity. Additionally, the semiconductors built into its servers have so far been exempt from Trump's tariff plan.

However, Supermicro's stock has since shed much of its gains, dropping by 5.9% as of 11:19 a.m. ET today. This volatility reflects the ongoing uncertainty surrounding the company's business and the potential impact of tariffs on its operations.

Supermicro has faced several challenges in the past year, including accounting questions and the risk of delisted shares. The stock had a strong rebound earlier this year after the company released long-delayed financial filings and avoided being delisted from the Nasdaq exchange. Despite this, shares have since stabilized as investors await updates on the company's business.

The semiconductor exemption from Trump's tariff plan may not be permanent. The president has warned that he will address semiconductors, which could result in additional duties. This could negatively impact Supermicro's customers, potentially leading to a reduction in sales estimates. The company has already revised its original guidance for fiscal 2025 sales from a range of $26 billion to $30 billion to a new range of $23.5 billion to $25 billion.

Management has indicated plans to expand its global manufacturing footprint while also increasing domestic operations. This strategy aims to boost profitability, with Chief Financial Officer David Weigand predicting that manufacturing in Asia could save the company 1 to 2 points on the margin.

The future for Supermicro's underlying business remains uncertain. Some investors are taking yesterday's stock bounce as an opportunity to exit their positions today, reflecting the ongoing concerns about the company's prospects.

Investors should closely monitor Supermicro's developments and the potential impact of tariffs on its operations. While the company has shown resilience in the face of challenges, the current market conditions and regulatory environment present significant uncertainties.

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ZestycloseAd7528
04/12
SMCI's dip feels like a buying opportunity 🤔
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Sensitive-Fix8857
04/12
@ZestycloseAd7528 How long u holding SMCI? Got a target price in mind?
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fluffnstuff1
04/12
Tariffs got these guys on a rollercoaster. 🎢 Wonder if they'll tighten up their finances or keep riding the waves.
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careyectr
04/12
Holding some $SMCI, betting on their manufacturing move.
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CrimsonBrit
04/12
Investors be like 🤔: tariffs = trouble, exemptions = temporary relief. SMCI needs a solid long-term plan.
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Gentleman1217
04/12
@CrimsonBrit What's SMCI's next earnings call?
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Oleksandr_G
04/12
SMCI's got accounting issues, but expanding globally could be their ace. High risk, high reward kinda situation.
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FTCommoner
04/12
Delisted shares risk? Yikes, SMCI gotta tighten up.
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googo69
04/12
Tariffs are wildcards, SMCI needs a solid plan.
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conquistudor
04/12
Trump's tariff exemption might be short-lived, brb 😂
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Overlord1317
04/12
$SMCI This move down is kinda what I've seen all along, even DELL with its big China exposure is up today, it's clear someone wants the stock down, maybe they're shorting it for some reason
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goodpointbadpoint
04/12
Trump's tariff exemption feels like a temporary reprieve. Long-term, SMCI needs to beef up its manufacturing game overseas.
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acg7
04/12
@goodpointbadpoint Agreed, manufacturing's key.
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gnygren3773
04/12
@goodpointbadpoint Where do you think they should expand?
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User avatar and name identifying the post author
ZestycloseAd7528
04/12
SMCI's dip feels like a buying opportunity 🤔
0
Reply
User avatar and name identifying the post author
Sensitive-Fix8857
04/12
@ZestycloseAd7528 How long u holding SMCI? Got a target price in mind?
0
Reply
User avatar and name identifying the post author
fluffnstuff1
04/12
Tariffs got these guys on a rollercoaster. 🎢 Wonder if they'll tighten up their finances or keep riding the waves.
0
Reply
User avatar and name identifying the post author
careyectr
04/12
Holding some $SMCI, betting on their manufacturing move.
0
Reply
User avatar and name identifying the post author
CrimsonBrit
04/12
Investors be like 🤔: tariffs = trouble, exemptions = temporary relief. SMCI needs a solid long-term plan.
0
Reply
User avatar and name identifying the post author
Gentleman1217
04/12
@CrimsonBrit What's SMCI's next earnings call?
0
Reply
User avatar and name identifying the post author
Oleksandr_G
04/12
SMCI's got accounting issues, but expanding globally could be their ace. High risk, high reward kinda situation.
0
Reply
User avatar and name identifying the post author
FTCommoner
04/12
Delisted shares risk? Yikes, SMCI gotta tighten up.
0
Reply
User avatar and name identifying the post author
googo69
04/12
Tariffs are wildcards, SMCI needs a solid plan.
0
Reply
User avatar and name identifying the post author
conquistudor
04/12
Trump's tariff exemption might be short-lived, brb 😂
0
Reply
User avatar and name identifying the post author
Overlord1317
04/12
$SMCI This move down is kinda what I've seen all along, even DELL with its big China exposure is up today, it's clear someone wants the stock down, maybe they're shorting it for some reason
0
Reply
User avatar and name identifying the post author
goodpointbadpoint
04/12
Trump's tariff exemption feels like a temporary reprieve. Long-term, SMCI needs to beef up its manufacturing game overseas.
0
Reply
User avatar and name identifying the post author
acg7
04/12
@goodpointbadpoint Agreed, manufacturing's key.
0
Reply
User avatar and name identifying the post author
gnygren3773
04/12
@goodpointbadpoint Where do you think they should expand?
0
Reply
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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