Super Micro Stock Tanks After-Hours On Flagging Weak Q3 Due To Client Order Deferrals: Retail Undeterred

Super Micro Computer, Inc. (SMCI) shares slumped in Tuesday's after-hours session after the artificial intelligence (AI) server maker flagged weakness in its preliminary third-quarter results.

The San Jose, California-based company expects net sales of $4.5 billion to $4.6 billion for the third quarter of the fiscal year 2025, down from its previous guidance of $5 billion to $6 billion and lower than the Finchat-compiled consensus estimate of $5.41 billion. 

The company guided to adjusted earnings per share (EPS) of $0.29-$0.31 versus the $0.46 to $0.62 estimated earlier and the $0.53 consensus estimate.

Super Micro attributed the weakness to delayed customer platform decisions moving sales into the fourth quarter. 

The company also noted that the gross margin for the quarter was 220 basis points lower than in the second quarter due to higher inventory reserves resulting from older generation products and higher costs to enable time-to-market for new products.

Super Micro stock came under pressure in 2024 amid a host of issues related to accounting and internal controls, which led to the resignation of the then-auditor, Ernst & Young, and delays in filing its financial reports. 

These issues are now behind the company following an independent investigation that found no wrongdoing, the appointment of a new auditor, and the company becoming current with its filings.

Super Micro's stock gained further ground after the company issued a positive outlook for the fiscal year 2026 in its second-quarter business update in February.

Notwithstanding the disappointing third-quarter business update, retail investors on the Stocktwits platform stayed 'bullish' (74/100) on the Super Micro stock, with the message volume at 'high' levels.

The stock was the top trending ticker on the platform late Tuesday and among the top five active tickers.

A bullish watcher blamed the post-market slump on short sellers and panic selling, adding that the stock would revert to $35 on Wednesday because all Super Micro has done is "push the revenue into next quarter!"

Another user recommended buying the dip, given the stock's attractive price-earnings (P/E) multiple.

Following the late Tuesday business update, Super Micro's stock plunged 15.06% to $30.58. However, it is up 18% year-to-date.

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