One company, Super Micro Computer Inc., watched its stock value drop by more than $2 billion. This plummet followed closely on the heels of the company’s release of its preliminary fiscal third quarter financial results. The company’s shares fell by as much as 19% on Tuesday, reflecting investor concerns over lower-than-expected performance compared to analyst projections. Even with the recent drop, Super Micro’s stock price tripled over the course of 2023. They more than tripled, powered by the company’s dominance in the high-octane artificial intelligence space.
Under CEO Charles Liang’s leadership, Super Micro has found a lucrative niche for itself. The firm’s profits come from selling servers powered by Nvidia’s processors — capitalizing on booming demand for everything tech related to AI. The company had a huge meltdown in 2022. Its market capitalization crashed by more than 80%. This drastic decline came about through three straight quarters of mediocrity – particularly in the second, third and fourth quarters.
On Tuesday’s preliminary results indicated Super Micro’s gross margin was down 220 basis points from the prior quarter. Each of these ventures is a significant investment, but this news created even deeper investor concerns. The company disclosed that longer than expected customer decisions on their platforms pushed some sales to the fourth quarter. This added wrinkle only complicates the company’s financial picture further.
“During Q3 some delayed customer platform decisions moved sales into Q4.” – Super Micro
Super Micro restated its financials for fiscal 2024 and its first two quarters of fiscal 2025 in February. This change is an important piece of its overall fiscal plan. This decision followed an onslaught of governance troubles. As a consequence, the company lost its auditor, Ernst & Young, which refused to sign off on its annual report last year. This combination of governance concerns has led to ongoing skepticism about the company’s commitment to the integrity of its operations and its financial reporting.
Despite the recent setbacks, Super Micro reported an 18% increase in stock value earlier in 2025 before Tuesday’s disappointing announcement. The broader tech market had experienced an overall downturn leading up to this announcement, adding even more pressure on Super Micro’s performance.
Looking forward, co-founder and CEO Charles Liang was bullish on the company’s continued expansion. He stated, “We have confidence that our calendar year 2025 growth could be a repeat of calendar year 2023, if not better, assuming the supply chain can keep pace with demand.” This announcement represents the company’s firm intention to focus on charting a course through present headwinds and working through to a resurgence.
Super Micro’s new midpoint of revenue guidance represents a blistering 18% growth y/y. This provides a bright spot for investors weathering the stormy market landscape. The company will need to address its governance issues and improve its financial performance to regain investor confidence and stabilize its share price.
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