After the U.S. market closed on Tuesday, Super Micro Computer $SUPER MICRO COMPUTER INC(SMCI)$ released its fiscal Q4 2025 earnings report — and it seriously disappointed investors. The company missed on all key metrics: revenue came in at $5.76 billion, short of the $6.01 billion analysts were expecting; gross margin was 9.6%, below the projected 10%; and adjusted EPS landed at $0.41, missing the $0.44 consensus.
The market didn’t take it well. The stock plunged over 18% in the first trading session after the report, wiping out more than $5 billion in market value — erasing a big chunk of the gains it had built up earlier this year.
Source: Google Finance
Q4 Results + Slashed FY26 Guidance
Super Micro’s $SUPER MICRO COMPUTER INC(SMCI)$ fourth-quarter results painted a mixed picture. Revenue grew 7.5% year-over-year to $5.76 billion, but even that growth was below expectations.
Profitability took a bigger hit: adjusted gross margin dropped 70 basis points from a year ago to 9.6%, marking the third straight quarterly decline. Adjusted EPS of $0.41 was down 24% year-over-year and missed expectations of $0.45.
Source: SMCI Q4 Earnings
What really spooked investors, though, was the drastic guidance cut for fiscal 2026. Management now expects Q1 revenue to land between $6–7 billion, with the midpoint slightly below estimates. EPS is projected to be in the $0.40–0.52 range — far under the $0.59 analysts were expecting.
As for full-year FY26 revenue? Super Micro now sees “at least $33 billion.” Back in February, it was guiding for $40 billion on the back of soaring AI server demand. That’s an 18% cut, and it’s the key reason the stock collapsed.
Source: SMCI Q4 Earnings
CEO Charles Liang tried to reassure investors by laying out future plans. He said the company aims to increase the number of large data center clients from four in FY25 to six to eight in FY26. He also pointed out that international expansion should help offset the impact of tariffs and regional cost differences.
What Challenges Are They Facing?
Management blamed the weak performance on delayed customer purchase decisions. Liang explained, “Our customers are waiting and evaluating the AI platforms between the current and upcoming GPUs, which delayed their commitments.”
Another big factor: the product upgrade cycle. In Q3, results fell short due to write-downs on older-gen GPUs and related components. The new-gen platforms only started ramping up recently, so Super Micro is stuck in a tough transition period — with both top-line and bottom-line pressure.
On top of that, the company is dealing with stiffer competition and tighter pricing. Dell $Dell Technologies Inc.(DELL)$ , in particular, has become a serious challenger. While Super Micro was once an early winner as a key partner for NVIDIA's $NVIDIA(NVDA)$ AI server chips, more players are entering the space, putting pressure on both market share and pricing power.
And don’t forget the shadow of corporate governance concerns. Just months ago, Super Micro faced accounting scrutiny after auditor Ernst & Young resigned. The company barely avoided delisting by filing its overdue financials in time — but its past run-ins with accounting scandals (including one in 2020) still haunt it. Now, management’s overconfidence in giving overly bullish forecasts could further erode investor trust.
How Is the Market Reacting?
Wall Street is growing increasingly nervous about stretched tech valuations. Firms like Morgan Stanley and Deutsche Bank have warned that the S&P 500 may be due for a pullback. Technical indicators back this up — the S&P’s 14-day RSI hit 76 last week, well above the “overbought” threshold of 70, the highest since July 2024.
Super Micro’s sell-off isn’t happening in isolation. Just a few months ago, Marvell Technology $Marvell Technology(MRVL)$ also cratered over 20% in a day after issuing guidance that failed to blow past expectations. In this market, simply meeting estimates isn’t enough — especially for high-flying AI stocks. They need to keep delivering blowout numbers to justify lofty valuations.
Invesight Viewpoint
With more analysts warning of a broader tech pullback, stocks tied to the AI theme are starting to look vulnerable. Super Micro’s plunge reflects a shift in investor mindset — the market is demanding not just high growth, but consistent outperformance and believable growth stories.
This correction is the result of overconfidence from management and a temporary plateau in demand. Now that guidance has been brought back down to earth, Super Micro will need to prove it can hit those targets — and then some — to win back investor confidence.
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