Super Micro Computer on Monday warned that its fiscal third-quarter revenue will fall well short of expectations. SMCI stock plunged on the news.
The San Jose, Calif.-based company, better known as Supermicro, said it expects to report sales of about $1.28 billion for the quarter ended March 31. It previously forecast sales of $1.47 billion, based on the midpoint of its outlook. Supermicro will release fiscal third-quarter results on May 2.
Supermicro blamed the shortfall primarily on component shortages impacting its next-generation server products. However, the company said those component supply issues mostly have been resolved.
"Supermicro saw record levels of engagements in our new product lines during the quarter," Chief Executive Charles Liang said in a news release. "We secured several large design wins whose orders were impacted by these new supply chain challenges. The challenges are improving as we speak, and we are now well positioned to fulfill delayed deliveries and have commenced production."
SMCI Stock Tanks On Warning
After the opening bell on the stock market today, SMCI stock fell as much as 9.4% to 97.21. SMCI stock ended the regular session down 8.1% to 98.59.
Wells Fargo analyst Aaron Rakers said the news could be perceived as another negative data point on the data center market.
In a note to clients, Rakers reiterated his cautious near-term view on server-chip makers AMD and Intel.
"With Supermicro often being an early ramp partner on next-gen server architectures, we think the company's negative preannouncement will result in increased questions on the pace of the Intel Sapphire Rapids Xeon-SP and AMD Zen 4 Genoa Epyc server CPU (central processing unit) ramp cycles," Rakers said.
AMD stock fell 1% to 87.57 on Monday while Intel stock slid 2.1% to 29.66.
Supermicro News Follows CDW Warning
San Jose, Calif.-based Supermicro likely also is facing shortages of Nvidia's H100 graphics processors, Wedbush Securities analyst Matt Bryson said in a note to clients. He rates SMCI stock as underperform.
"We continue to have concerns around high expectations for both sales growth beyond fiscal '23 and margins (which we view as unsustainably high at current levels)," Bryson said.
Supermicro's warning follows a similar announcement last week from tech products reseller CDW. On April 18, CDW cut its revenue forecast for the first quarter and lowered its outlook for the U.S. information technology market overall in 2023.
SMCI stock is on four IBD stock lists. Supermicro is on the IBD 50, Sector Leaders, Stock Spotlight and Tech Leaders stock lists.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
