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Super Micro Computer Stock Plunges. Is This a Buying Opportunity?
One of the most volatile stocks over the past year or so, Super Micro Computer (SMCI 2.87%) continued its habit of making big moves after its shares tumbled following the company's pre-announcement of poor fiscal Q3 earnings results. The stock has lost about two-thirds of its value over the past year.
Super Micro: Big Opportunity Or Falling Knife? (Upgrade)
Super Micro's stock dropped 12% after reporting preliminary Q2 sales of $4.5-4.6 billion, below the $5-6 billion target, yet sales grew 18% YoY. Despite a profit downgrade and margin pressure, Super Micro remains profitable and is valued attractively at a 9.1x profit multiple, similar to Dell and HP Enterprise. The server and storage market is projected to grow significantly, driven by AI deployment, providing long-term tailwinds for Super Micro's sales and profitability.
Super Micro Q3 Preliminary Results: Stay Calm And Double Down (Upgrade)
Don't overreact to Super Micro Computer, Inc.'s Q3 miss. It's mainly a temporary setback due to GPU rollout delays. The volatility is a chance to buy into the longer-term AI growth story. Be aware of Super Micro's reliance on Nvidia GPUs. It's a significant risk, but also know they're diversifying supply chains to reduce geopolitical exposure and make future quarters smoother. Short-term macro worries and recession talk might pressure SMCI stock in the near term, but keep perspective. Upcoming Fed rate cuts and ongoing AI expansion strongly favor holding through turbulence.
SMCY: Less Than Meets The Eye
Single-stock covered call funds like YieldMax SMCI Option Income Strategy ETF offer high yields but have significant downsides, including capped upside and retained downside risks. SMCY has lost money at a 32% annualized pace since inception, despite a 98.8% distribution rate, due to its structure and market volatility. Investors should avoid SMCY and consider direct ownership of SMCI shares if bullish, as SMCY's structure limits potential total returns.
Super Micro: Q3 Preliminary Results Overreaction Masks A CapEx Supercycle
Super Micro's Q3 FY25 preliminary revenue of $4.5–$4.6B missed guidance due to delayed customer platform decisions. Gross margin fell 220 basis points in Q3, validating our thesis that Super Micro is scaling via a high-volume, low-margin model. One customer made up 20% of FY24 revenue; another represented 44.8% of accounts receivable, raising concentration risk.
Super Micro Computer: Mounting Fundamental Risks Despite Durable AI Spending Trends
SMCI's FQ3 '25 miss has been disappointing indeed, with it highlighting the painful effects of the redirection of its orders since late 2024 as the management temporarily loses some credibility. This is worsened by the higher stagflation risks, with it potentially affecting its consumers' capex plans, as similarly observed in MSFT's and AMZN's paused capex. We posit that the SMCI management may further lower its FY2025 guidance from the previously lowered numbers, based on the YTD's underwhelming performance.
Super Micro Computer: Old Servers, New Cycle Ahead
The slow transition away from AI server racks integrating the older Hopper GPUs to the new Blackwell series is weighing on both the top and the bottom line of FQ3. That said, I'm projecting a rebound in FQ1 2026, fueled by Blackwell and AMD's upcoming MI350 series. The Street is also optimistic on this timeframe. At the moment, low factory utilization rates and high R&D costs are impacting profitability, with no immediate improvement expected in gross margins.
Here's Why I'm Staying Away from Super Micro Stock
Artificial intelligence (AI) server manufacturer Super Micro Computer (SMCI -11.53%) regained compliance with the Nasdaq exchange earlier this year by filing its outstanding quarterly and annual financial reports. The company delayed filing its annual 10-K report last year due to issues with internal controls.
Why Supermicro Stock Is Crashing, and Is It a Buying Opportunity?
Supermicro (SMCI -11.53%) disappointed investors with its preliminary results, which caused the stock price to fall.
Super Micro slashes Q3 revenue and profit forecasts, shares fall
Super Micro Computer Inc (NASDAQ:SMCI) shares plunged almost 16% after the high-performance server producer reported preliminary results for the fiscal third quarter below its earlier guidance. The company now expects revenue for fiscal Q3, which ended March 31, in the range of $4.5 billion to $4.6 billion, down from its earlier guidance of $5 billion to $6 billion and about $1 billion below estimates of $5.5 billion at the midpoint.
Super Micro's big warning is taking these stocks down with it
Investors are nervous about what Super Micro's profit warning and inventory trends could mean for the entire AI infrastructure market.
