Super Micro (SMCI) fell short of Wall Street’s revenue and profit expectations for its fourth quarter on Tuesday, struggling to compete with larger server makers in the market for high-performance computers used to train artificial intelligence models.
Shares of the San Jose-based company tumbled 16% in premarket trading Wednesday, following several downward revisions to its full-year guidance.
The company now forecasts fiscal 2026 revenue of at least $33 billion, a sharp pullback from its earlier target of about $40 billion announced in February. Analysts had been expecting $29.94 billion, according to LSEG data.
Though Super Micro has been gaining ground in the competitive server industry, analysts note that heavyweights like Dell Technologies and HP Enterprise continue to leverage their expansive customer bases to drive sales.
“Since we know the market for servers is very strong right now, it is safe to assume the disappointing results for Super Micro are due to share losses,” said Gil Luria, managing director at D.A. Davidson & Co.
“Their customers are very discerning right now and are choosing servers from Dell, HP and others,” he added.
Meanwhile, Dell raised its annual profit outlook, and Hewlett Packard Enterprise beat Q2 revenue and profit expectations.
Looking ahead, Super Micro expects improved chip availability in the coming fiscal year compared to recent quarters, which CEO Charles Liang said should support better growth, particularly after delays in Nvidia processor supplies affected recent results.
Super Micro’s shares have rallied roughly 90% year-to-date, fueled by investor optimism around demand for AI servers and the company’s liquid cooling technology.
“The expectations for all things related to AI, especially the large language and reasoning models, have captivated investors’ attention. Any softness is met with deep disappointment, which means lower stock prices,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.
Shares of Advanced Micro Devices also dropped in extended trading Tuesday after reporting weaker-than-expected data center revenue.
Super Micro reported revenue of $5.76 billion for the quarter ended June 30, below analysts’ average estimate of $5.89 billion. Its adjusted earnings per share of 41 cents missed estimates of 44 cents, primarily due to tariff impacts.
Pump Radar
Stock Alerts