Super Micro Computer Inc (NASDAQ: SMCI) Stock Overview

Super Micro shares plummeted by 13% on Tuesday, 6 August 2024, following the release of their fiscal fourth-quarter earnings, which fell short of analysts’ predictions.
The company reported a decrease in gross margin to 11.2%, compared to 17% in the same quarter last year and 15.5% in the previous quarter. Supermicro announced a 10-for-1 stock split, with trading on a split-adjusted basis scheduled to commence on 1 October.

Developments That Could Affect Supermicro’s Share Price

1. SMCI Declines Due to Concerns Over High Chip Production Costs
Supermicro's stock dropped by 12.3% in premarket trading on August 7, 2024, amid concerns about high AI server chip production costs affecting profit outlook, overshadowing positive sales projections.

In the fourth quarter, the company reported an adjusted gross margin of 11.3%, falling short of the 14.1% average analyst estimate, according to LSEG data. This shortfall resulted from rising supply chain costs and a shortage of key components.

Despite these challenges, CEO Charles Liang reassured investors that margins are expected to stabilize within the normal range by the end of fiscal 2025, reaffirming the company’s target gross margin of 14% to 17%.

2. Supermicro Announces First-Ever Stock Split
Supermicro has announced a 10-for-1 forward stock split, approved by its board of directors. This change will be implemented through an amendment to the company’s Amended and Restated Certificate of Incorporation, increasing the number of authorized common shares proportionally.

Shareholders will receive nine additional shares for each share they currently own, with the adjustment taking effect after the market closes on September 30. The stock is expected to begin trading on a split-adjusted basis on October 1.

3. Supermicro Indicates Delay of Nvidia’s Blackwell Until Early 2025
During the earnings call, CEO Charles Liang announced that significant quantities of Nvidia’s Blackwell GPUs are not expected until the quarter ending in March 2025, with only a limited number potentially arriving by December.

This delay has led Supermicro to forecast revenues of “only $26 billion to $30 billion” for fiscal year 2025, which commenced in July 2024.

Super Micro Computer stock continues wild ride

This week, SMCI climbed on positive reports from the AI server maker. Super Micro surged 16% Monday after the company released numbers showing strong demand for its products. The stock was up 12% on Thursday from the prior week.

Super Micro makes servers using Nvidia's (NVDA) AI chips for data centers that power artificial intelligence software. The company said it’s shipping servers containing over 100,000 Nvidia GPUs per quarter “for some of the largest AI factories ever built.”

Then on Tuesday, shares of SMCI fell 5% after a promising premarket rally that saw the stock jump as much as 7%. Daniel Newman, CEO of the Futurum Group, said investors’ euphoria over the company’s shipment data faded against the backdrop of Super Micro’s regulatory risk.

Super Micro CEO Charles Liang said the Hindenburg report contained “false or inaccurate statements” and “misleading presentations of information that we have previously shared publicly.” Liang said the company’s delayed 10-K filing would not affect the company’s fourth quarter financial results, adding that Super Micro would address Hindenburg’s allegations “in due course.”

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