Super Micro’s massive sales miss is the latest headache for the volatile AI trade
Super Micro erased all of its gains on the year after whiffing on earnings.
The “will he/won’t he” of tariffs has understandably become the crucial linchpin upon which stock markets turn as of late. But cracks in the AI momentum trade preceded the top in US stock markets, and were the bleeding edge and proximate cause of weakness in the S&P 500 that preceded the Rose Garden reciprocal tariffs announcement.
Hence why the ramifications of Super Micro Computer’s brutal preliminary Q3 earnings results could prove a broader challenge for the stock market as a whole. For the first three months of the year, the AI server company missed its own revenue guidance by nearly a billion as sales of about $4.55 billion were 15% shy of consensus, to boot. Adjusted earnings of roughly $0.30 also fell far short of the anticipated $0.53.
“During Q3 some delayed customer platform decisions moved sales into Q4,” the press release from Super Micro reads.
As its management team was intently focused on hitching its wagon to the rollout of Nvidia’s Blackwell GPU, the chip designer is squarely in line for some guilt by association.
“The company blamed the underperformance on customer-delivery timing, and given its increased inventory of older-generation GPUs, we believe customers will delay their rollout in favor of Nvidia’s Blackwell,” wrote Bloomberg Intelligence senior technology analyst Woo Jin Ho, who added that the big miss was “indicative of a reliance on mega-AI deals.”
The hope, of course, is that this is just demand delayed rather than demand that’s disappearing, and that it’s a company-specific problem rather than industry-wide. But shares of Nvidia are off about 2.5% in early trading, with fellow server seller Dell down 4%, suggesting some skittishness about what this means for AI-linked names as a whole.
Until this point, Super Micro had been doing quite fairly well year to date, buoyed by filing the necessary paperwork to stay on the Nasdaq and an aggressive sales growth forecast. That gave it the surface-level appearance of being a rare AI stock that was cheaply valued. This morning’s retreat erases all of its gains for the year.
To be attractive as a relatively inexpensive stock, investors need to have confidence that you can meet your operational goals. Super Micro’s massive miss, coupled with its history of accounting issues, are going to deteriorate faith in the company at best — and at worst, create another big stumbling block for an AI trade that’s already had to grapple with DeepSeek, concerns about data center demand, and tariffs before going into sharp recovery mode over the past few weeks.
