Super Micro Computer Inc.’s (NASDAQ: SMCI), stock dropped by 20 % today after its quarterly earnings report.
The market was negative despite the announcement of a forecast that exceeded expectations and an upcoming 10-for-1 split on October 1.
Nvidia Balckwell GPUs delayed
Charles Liang, the CEO of Nvidia’s Blackwell GPUs said that the first meaningful shipments of these GPUs would not be expected until the beginning of the second quarter in 2025.
It will probably be very low for Q4, which is the December quarter. Small volume of engineering samples. The real volume would have to come in the March quarter of next year. We only expect $26 to $30 billion.
Charles Liang
Microsoft and Google confirmed delays within their annual reports. Even though Nvidia’s CEO claims that many shipments would be completed by the end this year, customers may give a more accurate picture.
It’s not good when companies find a flaw in their design so late during the manufacturing process, like Nvidia.
Nvidia, Taiwan Semiconductor and others will need to work hard to correct the problems. Nvidia is not in a very competitive market, so a delay of 1-2 months won’t be affecting the company.
Super Micro Computer is one company that has been affected by this. The company gave a conservative forecast, as they don’t expect the Blackwell GPUs to have a significant impact on their liquid cooling rack sales until the end of the FY2025 quarter, ending in June 2025.
The forecasted revenues already reflect an impressive 87% growth YoY. This is even more impressive because it comes on top of a revenue increase of 110% in FY2024.
What do analysts say?
BofA downgraded the stock from a Buy to a Neutral rating. Analysts at BofA expect that the margins of the company will remain low despite expectations for strong revenue.
The fact that analysts are still in agreement with the company that they expect revenues to increase shows the AI industry will continue to be strong. Stocks that are geared towards AI infrastructure could benefit from this.
Wells Fargo kept its equal-weight rating and a $650 price target. According to the firm, the increased revenue will offset the reduced margins and cause no great concerns.
Samik Chatterjee, the head of J.P. Morgan’s analysts team, maintains his overweight rating with a price target of $950. The analysts believe that the lackluster margins of the company are already being priced.
Last trading price was $492. This is a discount of 48% to J.P. Morgan’s target.
This article Super Micro Computer shares plummet 20% after CEO blames Nvidia delays for underperformance appeared first on the ICD
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