Super Micro Computer Stock Tumbles After Warning Of Sales Shortfall

(SMCI), on Monday, warned that its fiscal third quarter revenue would fall far short of expectations. SMCI's stock fell on the news.

Supermicro, a company based in San Jose, Calif., expects to report sales around $1.28 billion during the quarter ending March 31. The company had previously predicted sales of around $1.47 billion based on its mid-point outlook. Supermicro will announce its fiscal third quarter results on May 2nd.

Supermicro attributed the shortfall to component shortages that affected its next-generation servers. The company has said that the majority of these component supply problems have been resolved.

In a press release, Chief Executive Charles Liang stated that Supermicro had seen record engagement levels in our new product line during the quarter. We secured several large orders whose deliveries were affected by the new supply chain challenges. We are seeing improvements in the challenges as we speak. We are now able to meet delayed deliveries, and have begun production.

Stock Tanks Alert: SMCI

SMCI's stock dropped as much as 9.4% after the opening bell on Monday. It now stands at 97.21. SMCI's stock fell 5.9% in midmorning trading on the stock exchange today to 100.98.

Aaron Rakers, an analyst at Wells Fargo, said that the news could be interpreted as yet another negative data point for the data center industry.

Rakers, in a letter to clients, reiterated his cautious view of AMD (AMD), and Intel (INTC) as server-chip manufacturers.

Rakers stated that "Supermicro is often an early ramp partner for next-gen server architectures. We think the company's pre-announcement negative will increase questions about the pace of Intel Sapphire Rapids Xeon SP and AMD Zen 4 Genoa Epyc central processing unit (CPU) ramp cycles,"

On Monday morning, AMD shares fell 1.7% to $86.94 while Intel stocks dropped 0.7% to $30.08.

Supermicro's warning comes after a similar announcement made last week by tech products reseller CDW. CDW lowered its forecast for revenue for the first quarter on April 18 and its outlook for U.S. IT market in general for 2023.

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