AI server provider, has faced significant market volatility recently, with its stock price halving over the course of just over a week. The decline was triggered by Super Micro Computer, Inc. preliminary fiscal first-quarter results, which showed revenue projections falling below earlier expectations. For the September quarter, the company expects revenue to range between $5.9 billion and $6 billion, missing both its earlier forecast of $6 to $7 billion and the broader Wall Street estimate of $6.44 billion. However, on a positive note, SMCI’s adjusted earnings per share (EPS) is projected at $0.75 to $0.76, slightly above analysts’ consensus of $0.74.
Looking ahead to the December quarter, Super Micro Computer, Inc. anticipates revenue around $5.8 billion at the midpoint, again missing analyst predictions of $6.84 billion. Similarly, the forecast for adjusted EPS stands at $0.61, below Wall Street’s estimate of $0.81. The company attributes this revenue softness to limited availability of Nvidia’s anticipated Blackwell GPUs, a key component for SMCI’s AI server products. The supply constraint has raised concerns about potential delays or yield issues in Nvidia’s production process, further impacting SMCI’s revenue outlook.
Analyst Hans Mosesmann Halts Coverage
In light of these challenges, Rosenblatt Securities analyst Hans Mosesmann, a highly ranked figure on Wall Street, has temporarily suspended his coverage of SMCI, citing the uncertainties surrounding Nvidia’s Blackwell GPU supply. Mosesmann remarked that substantial liquid-cooled capacity within SMCI is “just waiting for Blackwell,” signaling that Nvidia has not diverted its GPU market share to other original equipment manufacturers (OEMs) or original design manufacturers (ODMs). Instead, SMCI’s management highlighted its ongoing engagement with new cloud service providers (CSPs) and enterprise clients.
Mosesmann’s decision to pause coverage on Super Micro Computer, Inc. reflects a cautious stance amid the complex GPU supply environment and potential production delays. Other analysts have retained their assessments, with an average stock price target of $54.17, suggesting a potential upside of roughly 139% over the coming year. Nonetheless, the overall sentiment remains conservative, with SMCI holding a consensus “Hold” rating based on nine “Hold,” three “Buy,” and one “Sell” recommendations from analysts.
Auditor Change and Compliance Issues
Beyond financial forecasts, SMCI is grappling with internal challenges. The company’s auditor, Ernst & Young, recently resigned, prompting SMCI to seek a replacement auditor. Despite the change, SMCI asserts that customer service remains unaffected, and an investigation led by its Special Committee found no evidence of fraud or misconduct.
However, the resignation has delayed the completion of SMCI’s fiscal year 2024 10-K filing, leading Nasdaq to issue a non-compliance notice on September 17. This notice signals a risk of delisting for SMCI, but the company has assured shareholders that it is taking necessary actions to restore compliance with Nasdaq’s listing standards promptly.
The convergence of these financial shortfalls, supply chain uncertainties, and compliance issues has cast a shadow over Super Micro Computer Inc’s immediate future. For now, the AI server provider remains committed to addressing these obstacles, while the market awaits further clarity on its performance and strategic direction.
