Charles Liang, CEO of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on June 5, 2024.
Annabelle Chih | Bloomberg | Getty Images
Super Micro Computer shares experienced a significant downturn in after-hours trading on Tuesday, plummeting as much as 10% following the release of its fiscal first-quarter results, which fell short of analyst expectations. The server manufacturer’s performance raises concerns about its ability to maintain its momentum in the fiercely competitive AI infrastructure market.
The company’s reported figures, compared against LSEG consensus estimates, are as follows:
- Earnings per share: 35 cents adjusted, versus an expected 40 cents.
- Revenue: $5.02 billion, lagging behind the anticipated $6 billion.
Super Micro’s revenue represents a 15% decrease from the $5.94 billion reported in the same period last year, according to a company statement. This announcement comes on the heels of preliminary earnings released approximately two weeks prior, where the company indicated revenue expectations of $5 billion for the quarter, a downward revision from the initial guidance of $6 billion to $7 billion.
Net income also suffered a substantial decline, more than halving to $168.3 million, or 26 cents per share, from $424.3 million, or 67 cents per share, in the corresponding quarter of the previous year.
In their earlier, limited report last month, Super Micro attributed the shortfall to “design win upgrades,” which reportedly shifted some anticipated first-quarter revenue into the second quarter. The company now forecasts sales of $10 billion to $11 billion for the current quarter, exceeding the LSEG’s average estimate of $7.83 billion.
Super Micro has undeniably benefited from the explosive growth in artificial intelligence, with its servers being highly sought after due to their compatibility with Nvidia GPUs. However, after experiencing rapid expansion from late 2023 through 2024, the company’s growth appears to have plateaued. Some analysts suggest that Dell has been gaining market share, intensifying the competitive landscape.
Prior to Tuesday’s disappointing report, Super Micro’s stock had enjoyed a strong year, climbing 55%.
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