AI Worries Resurge After Super Micro Slumps -17% Following Poor EPS Results...

Super Micro: “Gimme my monay!* 

Literally everyone: *no clap* 

As the market appears to be roaring back after last week's bi-polar diagnosis, Super Micro Computer has shown up to the comeback potluck with what looks like a half-eaten bag of chips. 

(Source: Giphy)

In short, despite the company dangling a shiny 10-for-1 stock split (aka Big Tech’s equivalent to NCAA Football 25’s “Four Verticals” play), Super Micro has taken a nosedive off the earnings cliff leaving most investors unhappy. 

(Source: Wall Street Journal) 

For starters, Super Micro’s earnings per share numbers kicked off the bad vibes as it came in at $6.25, which sounds impressive at first until you realize Wall Street was expecting $8.07. Ooof. Net sales on the other hand beat expectations by the hair on its chinny, chin, chin at $5.31 billion, while gross margins gave up the ghost by dropping to 11.2% (down from last year's 17%). 

This obviously had investors hearing “voices” in their heads as panic swept the stock resulting in a massive -17.17% plunge. 

(Source: Giphy) 

With that said though, in light of the sell-off, there were some good elements to Super Micro’s numbers that gave investors something to look forward to. For instance, net income came in at a nice $353 million, up $194 million from last year. However, margins are about as tight as Steve Jobs’ turtle necks right now thanks to supply chain headaches and increased competition from “Dude you have a Dell?” and HP. 

(Source: Imgflip)

Another hopeful outlook is the impact of the10-for-1 stock split that may attract more buying attention as the company is currently trading in the $500 price per share range. However, even though this will make share’s more affordable, in hopes of attracting degenerate traders like moths to a flame - the stock split won’t change the company fundamentals. Translation: It’s like putting lipstick on a pig - it might look prettier… but it’s still a fat a$$ pig.

(Source: Giphy) 

“Did you just call Super Micro a pig?”

I sure as hell did. You see, despite the positives here, Super Micro Computer’s numbers still follow the same look as Microsofts, Nvidia’s, and Apple's numbers in terms of AI: All hype and no substance. Which exactly proves my point with earnings results like this as Super Micro’s current earnings and profit margins look like a Michael Bay movie without CGI. 

(Source: Quora) 

This of course has investors and analysts highly skeptical within the tech space in general, because while Super Micro and other AI contenders have rode the AI wave this year, the disconnect between financial performance and industry expectations raises concerns about “talking the talk, but not walking the walk”. 

(Source: Futurism) 

Plus, when you throw in the anticipated delay in Nvidia’s new Blackwell chips, the uncertainty regarding future revenue streams for Super Micro Computers is worriesome. For this reason, some analysts like Bank of America are already adjusting their price targets to a neutral rating (down from a buy) on the company. 

(Source: Investing.com) 

Now with that said, Super Micro does expect sales for next quarter to settle between $6 billion to $7 billion, compared to analysts' average estimate of $5.46 billion. But just like investors' concerns about AI in general, these expected sales are just talk until proven otherwise. 

Until then, don’t bet the farm on Super Micro. It’s down -58% from its March highs, which is the kind of performance that’ll have you living in a van down by the river. (RIP Chris Farley & Steve Jobs). 

(Source: Giphy) 

At the time of this writing, Super Micro Computers is down -16.36% on the day. 

Stocks.News holds positions in Microsoft, Apple, and Dell as mentioned in the article.