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Luke Kawa

Investors have run out of patience with Super Micro’s many excuses for sales misses

Shares of Super Micro Computer are tumbling on Wednesday after disappointing fourth-quarter results, which saw the server company whiff on sales and earnings. The stock is down nearly 20% as of 10:25 a.m. ET, making the company the worst performer in the S&P 500.

If I could boil down the cause of the substantial volatility in shares of Super Micro Computer this year to one sentence, it would be this: it’s in the AI business — which is clearly booming — and management makes big promises on sales that it fails to deliver on.

Sales are the football, management is Lucy, and investors are Charlie Brown, falling for each renewed promise and then having it yanked away and landing flat on their backs.

Here’s a timeline of what Super Micro has said about sales in the past few months:

  • April 29: Super Micro announces preliminary Q3 results ahead of schedule, saying its Q3 sales (that is, the first three calendar months of 2025) would come in around $4.55 billion, versus previous guidance for about $5.5 billion. That figure was about 15% shy of the consensus estimate.

    • Management said, “During Q3 some delayed customer platform decisions moved sales into Q4.” At the time, analysts commented that this was likely a function of the delay in Nvidia’s Blackwell ramp, with Bloomberg Intelligence’s Woo Jin Ho suggesting that the miss was “indicative of a reliance on mega-AI deals.” So, a timing issue. Let’s go forward in time.

  • May 6: Super Micro delivers those actual Q3 results.

    • During the conference call following earnings, CFO David Weigand tacked on the phrase “and later” to the prior statement on the timing of sales: “Q3 revenues were down quarter-over-quarter as certain new platform decisions by customers moved some sales into Q4 and later.” In those eight days, Super Micro seemingly learned that customers were holding off on purchases even longer.

    • Management guided for sales of $6 billion (plus or minus $400 million) in its Q4, well below the expected $6.6 billion.

    • CEO Charles Liang said that they “remain very confident” in its $40 billion sales target for fiscal 2026 (the 12 months ending June 2026), but refrained from explicitly reiterating that as formal guidance.

  • August 5: Super Micro delivers disappointing Q4 results.

    • Liang attributed the revenue shortfall to “a capital constraint that limited our ability to rapidly scale production, and specification from a major new customer that delayed revenue recognition because of some new-add features.” One wonders whether this capital constraint delaying production was a known problem that could have been disclosed earlier — say, at the time of the last sales miss — or if it manifested more suddenly.

    • Super Micro says fiscal 2026 sales will be “at least $33 billion,” which, while above the $30 billion the Street was looking for, is less than the $40 billion predicted in May.

Mercifully for stock market bulls, by now, it seems apparent that any shortfalls at Super Micro are not indicative of broader issues with the AI trade.

The stock still screens as a rare unicorn: an relatively inexpensive AI-linked stock. That said, investors appear to be losing patience with its excuses for why it’s unable to capitalize on an industry-wide boom. There’s always next quarter to make good on its promises and show that the rationalizations for its recent operational performance are indeed correct. But with its recent track record, it’s little wonder investors are having doubts and voting with their feet by dumping the stock.

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Matt Phillips

‘Golden age of profit margins’ seen in 2026

Wall Street tends to be a pretty optimistic place. But on one measure, market watchers are the most optimistic on record.

FactSet data shows the consensus estimate for S&P 500 net profit margins in calendar year 2026 calls for the gauge to climb to 13.9% in 2026.

But if borne out by events next year “it will mark the highest (annual) net profit margin reported by the index since FactSet began tracking this metric in 2008,” wrote John Butters, senior earnings analyst at the financial data company.

A recent story from Barron’s also commented on the expectations for especially fat profit margins embedded into forecasts for next year.

“We are in the golden age of margins,” RBC’s Capital Markets’ head of US equity strategy, Lori Calvasina, told the magazine.

That’s good news for investors looking forward to next year. But the follow up question, of course, is where the growth in profitability is expected to come from. The answer, as you might have guessed, is tech. Though the precise mechanisms by which those profits land in the coffers of the giant tech firms remains something of a mystery. Barron’s doesn’t get into the details, saying “call it benefits from AI, pricing power, or whatever.”

That doesn’t exactly sound like money in the bank. But even die-hard haters of AI have to acknowledge that betting against the ability of giant tech companies to generate massive profit growth has been a bad trade for the last couple decades.

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But if borne out by events next year “it will mark the highest (annual) net profit margin reported by the index since FactSet began tracking this metric in 2008,” wrote John Butters, senior earnings analyst at the financial data company.

A recent story from Barron’s also commented on the expectations for especially fat profit margins embedded into forecasts for next year.

“We are in the golden age of margins,” RBC’s Capital Markets’ head of US equity strategy, Lori Calvasina, told the magazine.

That’s good news for investors looking forward to next year. But the follow up question, of course, is where the growth in profitability is expected to come from. The answer, as you might have guessed, is tech. Though the precise mechanisms by which those profits land in the coffers of the giant tech firms remains something of a mystery. Barron’s doesn’t get into the details, saying “call it benefits from AI, pricing power, or whatever.”

That doesn’t exactly sound like money in the bank. But even die-hard haters of AI have to acknowledge that betting against the ability of giant tech companies to generate massive profit growth has been a bad trade for the last couple decades.

markets
Luke Kawa

Opendoor rises after CEO Kaz Nejatian touts an explosion in its home-buying footprint

Opendoor Technologies gained in early trading after CEO Kaz Nejatian touted an explosion in the company’s home-buying footprint.

In a message on X, the former Shopify COO posted two maps: one of which depicts a fairly limited area in which the online real estate company would buy or sell homes, and the second of which suggests that has now expanded to include the entire lower 48:

In a follow-up tweet, Nejatian attributed the gains to AI, writing, “First pic took 10 *years* of work without AI. Second pic took 10 *weeks* of work with AI.”

On his first earnings call as CEO, Nejatian said the company had adopted a “default to AI approach.”

One of his first pledges was to launch Opendoor everywhere in the lower 48.

markets
Max Knoblauch

Hertz surges on bullish options activity

As millions begrudgingly make their way to the rental car counter amid the winter holidays, investors are pouring into calls and sending Hertz stock soaring.

As of 10:51 a.m. eastern, Hertz had seen 17,861 calls traded. That’s already significantly ahead of the 20-day average volume of 12,956. Hertz shares are up more than 12%.

Seemingly juicing the rally was a post on X that read “car rental companies could end up being the picks and shovels of autonomy” that was reposted by billionaire Bill Ackman, whose hedge fund is one of Hertz’s largest shareholders.

If Hertz’s price action holds, the move will mark its ninth-best trading day of 2025.

markets
Luke Kawa

POET Technologies jumps on elevated call activity

Optical communications company POET Technologies is up double digits in early trading on Monday as this potential supporting player in the AI boom gets a bid from the options market.

Just an hour after the opening bell sounded, call volumes are already running well above their five-session average for a full day.

The stock became a retail favorite in early Q4 right before many speculative trades began to retreat, with record call volumes of nearly 600,000 on October 7. The last big bump in options activity came on December 3, the session after Marvell’s acquisition of Celestial AI, a customer of POET, offered some validation for its technology as a data center solution.

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