Super Micro's Stock Plummets After Earnings Warning, Nvidia's Transition Likely to Blame

Super Micro Computer Inc. (SMCI) saw its stock plunge by 15% in after-hours trading on Tuesday, following a significant earnings warning for its fiscal third quarter. The company cited "delayed customer platform decisions" as the primary reason behind the revenue and earnings shortfall, with Nvidia's new Blackwell platform likely contributing to the problem.

Reasons Behind the Earnings Shortfall

The San Jose-based server maker warned that its March-quarter results would fall well below expectations, now forecasting $4.5 billion to $4.6 billion in revenue, down from its previous forecast of $5.0 billion to $6.0 billion. Additionally, Super Micro expects adjusted earnings per share (EPS) of 29 to 31 cents, much lower than its earlier target of 42 to 62 cents.

Wall Street analysts, according to FactSet, had been expecting $5.4 billion in revenue and 53 cents per share in adjusted earnings for the quarter.

Nvidia's Blackwell Platform May Be a Key Factor

Super Micro’s disappointing forecast could be tied to the transition of customer platforms to Nvidia's Blackwell product family, which was introduced earlier this year. Nvidia has already sold out its initial inventory of the Blackwell chips, which are designed for AI computing. As Super Micro adapts to this shift, it may have had to take a write-down on older-generation Nvidia GPUs, contributing to higher inventory reserves and reducing profitability.

Stock Performance and Future Outlook

Despite the recent decline, Super Micro's stock has seen a year-to-date increase of about 18%, partly due to positive momentum in February when the stock hit $97.67. This gain was driven by the company’s efforts to get back in compliance with Nasdaq after filing its delayed financial reports. However, the after-hours decline has left the stock nearly 70% below its February peak.

Super Micro is scheduled to report its official fiscal third-quarter earnings on Tuesday, May 6, after the market closes. Analysts and investors are awaiting more detailed information about the company’s transition to new platforms and the impact on its financials.

Both Super Micro and Nvidia have not yet responded to requests for comment regarding the matter.