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.
