AI hype warning signals reappear! Super Micro Computer's preliminary performance falls far short of expectations, causing a post-market crash that triggers an industry earthquake

According to Zhitong Finance APP, after the U.S. stock market closed on Tuesday, Super Micro Computer (SMCI.US) saw its stock price plummet after the preliminary performance announced was far below analysts' expectations, indicating that the company's business recovery plan is progressing slowly.

The artificial intelligence (AI) server manufacturer stated on Tuesday that it expects third-quarter sales to be between $4.5 billion and $4.6 billion, which is not only significantly lower than the analysts' average expectation of $5.35 billion but also well below the company's previous performance guidance of about $5.5 billion. For the quarter ending March 31, the adjusted earnings per share are expected to be only $0.29 to $0.31, while the market had expected $0.53.

Once a star stock highly sought after in the AI concept, Super Micro Computer enjoyed great success due to the surge in demand for AI servers equipped with high-performance graphics cards. In February of this year, the company also provided a positive long-term revenue guidance, stating that sales would reach $40 billion in the fiscal year ending June 2026, nearly double the analysts' forecast for this fiscal year. CEO Charles Liang had told analysts, "If the supply chain can keep up with demand, we are confident that we can replicate or even exceed the growth of 2023 by 2025."

However, the company explained that some customers have postponed their purchasing plans, leading to orders being pushed to this quarter. This disappointing report caused its stock price to drop nearly 20% in after-hours trading after closing at $36 on Tuesday. Chip giant NVIDIA (NVDA.US) fell about 2%, while AMD (AMD.US) dropped about 1%.

Bloomberg Intelligence analyst Woo Jin Ho wrote in a report, "Super Micro Computer's preliminary performance for the third quarter is 15% lower than previous guidance, exposing its excessive reliance on large AI orders. The company attributes the weak performance to changes in customer delivery timing, but considering its old GPU inventory backlog, we believe customers may be waiting for products equipped with NVIDIA's new generation Blackwell chips before making purchases."

Over the past 12 months, Super Micro Computer's stock price has fallen by 60%. Previously, the company not only failed to submit its annual report for the 2024 fiscal year on time, but its auditing firm Ernst & Young also resigned last October, citing "concerns about the company's governance and transparency." The company, headquartered in San Jose, California, faced delisting risks until it resubmitted its financial reports at the end of February this year, thus regaining compliance with NASDAQ listing rules.

The company also stated in its announcement that the gross margin for the third quarter decreased by 220 basis points compared to the previous quarter, mainly due to "increased impairment provisions for old product inventory" and "additional costs incurred to accelerate the launch of new products." Management will hold a conference call on May 6 at Eastern Time to provide a detailed interpretation of the performance.

AI Spending Slows

As U.S. President Trump’s comprehensive tariffs on trade partners raise concerns about a global economic slowdown, investor unease regarding spending in the AI sector has intensified.

It is noteworthy that although tech giants like Google (GOOGL.US) and Amazon (AMZN.US) have recently reaffirmed their AI investment plans, Wall Street has begun to be wary of potential signs of a slowdown in AI infrastructure investment. TD Cowen analysts disclosed last month that Microsoft (MSFT.US) has canceled several data center projects involving 2GW of power due to oversupply DA Davidson analyst Gil Luria pointed out: "Some hyperscale customers may be adjusting their data center plans based on multiple factors, including economic weakness, equipment tariff policies, and delays in the delivery of NVIDIA's Blackwell new products." Super Micro Computer announced in February that its products equipped with NVIDIA's Blackwell chips have fully entered production.

Market analysts generally believe that despite the successive release of the new generation of chips, the demand for previous generation AI chips will continue due to the tight supply of advanced processors. Michael Ashley Schulman, Chief Investment Officer of Running Point Capital, stated: "Super Micro Computer's predicament is more due to its own issues rather than a general industry phenomenon. Tariff policies may have affected market sentiment, but the real reason for the stock price plunge is internal mistakes—delayed customer spending and performance not meeting expectations."

As a result of this incident, competitors in the server industry, Dell (DELL.US) saw its stock price drop nearly 5% in after-hours trading, while Hewlett Packard Enterprise (HPE.US) fell about 2%. Carson Group portfolio manager Blake Anderson pointed out that some customers may choose other suppliers to avoid Super Micro Computer's internal issues, which may bring new orders to Dell and Hewlett Packard Enterprise