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Takeaways
- Super Micro Computer shares plunged Wednesday after the server manufacturer published preliminary quarterly results that were below its previous forecast.
- Analysts lowered their price targets for the stock, pointing to uncertainty around the timing of customers' product transitions.
- JPMorgan said it doesn't see declining demand for AI servers, but added the downward revision could hurt Supermicro's credibility.
Super Micro Computer (SMCI), a server manufacturer, published preliminary quarter results below its prior expectations on Wednesday, leading analysts to reduce their price target.
JPMorgan analysts moved their target down to $36 from $59 while Barclays analysts dropped to $34 from $59. Recent trading has seen shares of Supermicro down by close to 16%, at around $30.
The Nvidia partner, which has been in a lot of trouble, attributed this revision to consumer timing problems that pushed sales forward into the next financial quarter. This raised concerns about a potential slowdown in expenditures amid uncertainty over Trump’s changing tariff policy.
JPMorgan analysts stated that while the variability in sales timing is a concern, they don't view the shift as a sign demand for AI servers is slowing. Nevertheless, they stated that “the F3Q results do not help the company to reinforce its credibility with investors regarding its guidance practices.”
Supermicro expects revenue for the fiscal third quarter to be between $4.5 billion and $4.6 billion. This is well below its original estimate of $5 billion to 6 billion. Barclays called Supermicro’s original outlook “too optimist to begin with,” citing uncertainty on AI server build with a lack in visibility into [2025] “As customers go through product changes.”
The company plans to hold a conference call after the close of the market on Tuesday, September 14, to discuss its fiscal third quarter results.
Supermicro’s shares have experienced significant volatility in the past year, as concerns about the company’s accounting practices and late filings led to fears that it could be delisted. The shares were lifted after the company met its deadline to file delayed reports. The shares are now roughly flat in 2025. They have also lost more than half of their value over the last 12 months.
