Super Micro Falls Most in Nine Months After Cutting Forecast

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4 days ago

(Bloomberg) -- Super Micro Computer Inc. shares plunged the most in nine months after the company lowered its fiscal-year revenue forecast, raising questions about sales and pricing pressures around powerful AI servers.
Revenue in the year ending in June 2026 will be at least $33 billion, Super Micro said Tuesday in a statement. In February, the company offered a bullish long-term outlook because of demand for AI products with Nvidia Corp.'s chips, saying sales would be $40 billion — then almost twice as much as analysts' estimates for the current fiscal year.
The profit forecast for the period ending in September also implies a 5% operating margin, while Wall Street, on average, was expecting 7%, said Woo Jin Ho, an analyst at Bloomberg Intelligence.
Super Micro's shares have surged 88% this year on optimism it would benefit from soaring interest in AI gear. Instead, the company's revised fiscal-year outlook raises questions about its ability to capitalize on the demand for artificial intelligence equipment with the latest Nvidia Blackwell chips. The company has also been struggling with margins as it deals with older inventory amid pressure to price its products lower in order to win AI server deals over rivals.
'Super Micro's 1Q and 2026 outlook lowers the expectations bar,' Ho said. 'However, its outlook implies a highly competitive pricing environment in these mega-server deals, in particular from Dell.'
The shares declined 20% to $45.56 at 11:27 a.m. in New York, the biggest intraday drop since Nov. 6, 2024.
'Delays in Blackwell availability is partially to blame, and we suspect the timing of deals could be clouded in 2H,' Ho said in a note. 'But the company's history of poor execution makes it difficult to give it the same benefit of the doubt awarded to tech bellwethers.'
Dell Technologies Inc. has also been pushed to accept narrower margins in order to secure large deals like its AI server contract with xAI, Bloomberg reported earlier this year, citing people familiar with the deals.
Super Micro reported that fiscal fourth-quarter revenue increased 7.5% to $5.76 billion. Profit, excluding some items, was 41 cents a share, the San Jose, California-based company said in a statement. Analysts, on average, estimated profit of 44 cents on sales of $6.01 billion.
Chief Executive Officer Charles Liang said some customers continue to wait for new products with the latest Nvidia chips, hurting demand for current offerings. 'We have to wait and see,' he told analysts on a conference call after the results, noting that the company expects greater availability of those powerful AI semiconductors in the future compared with the past two quarters.
In the period ending in September, Super Micro projected revenue will be $6 billion to $7 billion. Earnings, excluding some items, will be 40 cents to 52 cents a share. Analysts, on average, projected profit of 59 cents on sales of $6.59 billion.
(Updates with share price in the sixth paragraph)
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