Super Micro Plummets 9-Month Low After Forecast Cut

Super Micro Computer Inc. Shares Drop Sharply Amid Revised Revenue Outlook

Shares of Super Micro Computer Inc. experienced their steepest decline in nine months after the company revised its fiscal-year revenue forecast downward, sparking concerns about its ability to maintain strong sales and pricing power in the competitive AI server market.

The company announced that revenue for the year ending in June 2026 will be at least $33 billion, a significant drop from its previous projection of $40 billion made in February. At that time, Super Micro had expressed optimism about the growing demand for AI products powered by Nvidia Corp.’s chips. The new forecast falls well below analysts’ expectations for the current fiscal year, raising questions about the company’s long-term growth strategy.

In addition to the revenue revision, the company also lowered its operating margin forecast for the period ending in September to 5%, compared to the average Wall Street expectation of 7%. Analysts have pointed to this as a sign of increasing pressure on margins, especially in the high-stakes AI server market.

Super Micro’s shares had surged 88% this year, driven by investor optimism about the company's potential to benefit from the rising demand for AI infrastructure. However, the recent outlook has cast doubt on its ability to capitalize on the latest developments in AI technology, particularly with the release of Nvidia’s Blackwell chips. The company is also grappling with challenges related to older inventory and the need to lower prices to remain competitive in securing large AI server contracts.

Analysts suggest that the revised forecast indicates a highly competitive pricing environment, especially with Dell Technologies Inc. emerging as a key competitor. “Super Micro’s 1Q and 2026 outlook lowers the expectations bar,” said Woo Jin Ho, an analyst at HAWXTECHtelligence. “However, its outlook implies a highly competitive pricing environment in these mega-server deals, in particular from Dell.”

On Tuesday, Super Micro’s shares fell 20% to $45.56 in New York, marking the largest intraday drop since November 2024. The decline comes amid concerns over delays in the availability of Nvidia’s Blackwell chips, which are critical for next-generation AI servers. Analysts believe that these delays could impact the timing of major deals in the second half of the year.

Dell Technologies has also faced similar challenges, reportedly accepting narrower profit margins to secure large AI server contracts, such as its deal with xAI earlier this year. This trend highlights the broader pressures facing companies in the AI hardware sector.

Despite the revised forecasts, Super Micro reported some positive results for its fiscal fourth-quarter. Revenue increased by 7.5% to $5.76 billion, and adjusted earnings per share reached 41 cents. However, this fell short of analyst estimates, which had projected 44 cents on sales of $6.01 billion.

CEO Charles Liang acknowledged that some customers are waiting for new products featuring the latest Nvidia chips, which has affected demand for current offerings. “We have to wait and see,” he told analysts during a conference call following the results. He added that the company expects greater availability of these advanced AI semiconductors in the future compared to the past two quarters.

For the period ending in September, Super Micro projects revenue between $6 billion and $7 billion, with adjusted earnings per share ranging from 40 cents to 52 cents. Analysts, however, had expected 59 cents on sales of $6.59 billion.

As the AI hardware market continues to evolve, Super Micro faces a challenging path forward. The company must navigate intense competition, pricing pressures, and supply chain uncertainties while maintaining its position as a leader in AI server innovation.