Surprising guidance change sends Supermicro falling | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Super Micro Computer (SMCI) shares fell 1.4% on May 7 after the company reported disappointing earnings and slashed its full-year outlook, stoking fresh concerns about demand and economic headwinds.

For its fiscal third quarter, the server maker posted adjusted earnings of 31 cents per share, well below Wall Street’s estimate of 50 cents. Revenue came in at $4.60 billion, missing the expected $5.42 billion.

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The company also cut its full-year revenue forecast to a range of $21.8 billion to $22.6 billion, down from its earlier $23.5 billion to $25 billion estimate. That’s below the consensus of $23.5 billion.

“Some customers delayed making platform decisions in the quarter,” said Supermicro CEO Charles Liang. “We do expect many of those commitments to land in the June and September quarters.”

Liang added that economic uncertainty and tariff impacts “may have a short-term impact.”

On May 7, the Federal Reserve left interest rates unchanged, citing growing risks of inflation and unemployment.

Rates have been steady since last December as officials navigate the uncertainties tied to President Donald Trump’s tariff plans, which could push up prices and slow economic growth.

Supermicro stock is up 6.56% year-to-date as of May 7, while the S&P 500 index has lost 4.26% over the same period.

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Supermicro’s trouble started last August

Before its recent troubles, Supermicro was a darling among AI investors. The stock hit its peak in March 2024, fueled by soaring demand for servers powered by Nvidia chips.

The company builds high-performance server hardware, supplying major cloud players like Microsoft (MSFT) and Amazon (AMZN) . But since that high point, shares have dropped 72% as investor confidence faded.

Its troubles mounted last August after a report from short-seller Hindenburg Research accused the company of “glaring accounting red flags.” Shortly after, Supermicro delayed its 10-K filing for the fiscal year ended June 30.

In October, Ernst & Young resigned as its auditor. Though an internal investigation found no misconduct, Supermicro was removed from the Nasdaq 100 index in December.

The company said it has filed all outstanding financial statements.

Analysts lower Supermicro stock price targets

Several analysts have lowered their stock price target for Supermicro after the earnings.

Wedbush lowered its price target to $30 from $40 and reiterated a neutral rating, citing Supermicro management’s cautious outlook and the decision to withdraw 2026 guidance.

“While we applaud a more conservative/less ambitious approach, we also are unclear if enough pragmatism is baked into the company’s outlook given macro/policy uncertainty,” the analysts wrote in a research report.

The firm believes that Supermicro’s diversified manufacturing presence and significant U.S. capabilities could allow it to better navigate policies like tariffs than its peers. However, it questions the sustainability of the margin profile of the AI server industry in light of the number of entrants.

More Wall Street Analysts:

JPMorgan cut its target by $1 to $35, warning that delayed customer deployments are becoming a broader issue. Northland reduced its target to $59 from $70, noting disappointment relative to its prior bullish expectations.

Supermicro stock closed at $32.48 on May 7. It is up 6.56% year-to-date, while the S&P 500 index has lost 4.26% over the same period.