The stock of Super Micro Computer (SMCI) crashed 20% on Aug. 6 after the company reported weak financial results and offered disappointing forward guidance.
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The second-quarter print has brought a strong rally in SMCI stock to a screeching halt. Prior to Aug. 6, Super Micro Computer’s share price had risen 90% this year and was a top-performer among technology companies. Investors had viewed the concern as a top beneficiary of the artificial intelligence (AI) trade.
SMCI stock had trended higher alongside shares of Nvidia (NVDA), whose microchips run on Super Micro Computer servers. Many analysts had expected Super Micro Computer to benefit from the AI data center buildout and increasing demand for its servers. However, signs are now emerging that Super Micro Computer’s fortunes may not be so bright.
Disappointing Print
The Silicon Valley-based company’s latest financial results missed Wall Street’s targets across the board, with both profit and sales coming in below expectations. Worse, Super Micro Computer offered a weak outlook, saying it expects earnings of $0.40 to $0.52 per share on $6 billion to $7 billion in revenue for the current quarter. Analysts had forecast earnings of $0.59 a share and $6.6 billion in sales.
Management blamed the poor showing on uncertainty caused by U.S. President Donald Trump’s tariff regime, saying it has impacted spending decisions in the corporate sector. However, Super Micro Computer is also recovering from an accounting scandal that saw its auditor resign and the company miss several quarterly financial filings.
Super Micro Computer narrowly avoided being delisted from the Nasdaq exchange on which it trades.
Is SMCI Stock a Buy?
The stock of Super Micro Computer has a consensus Moderate Buy rating among 15 Wall Street analysts. That rating is based on six Buy, seven Hold, and two Sell recommendations issued in the last three months. The average SMCI price target of $44.57 implies 1.26% downside from current levels. These ratings are likely to change after the company’s latest financial results.
