Yahoo Finance

KEY TAKEAWAYS

• Super Micro Computer shares dropped 6% in premarket trading Wednesday, a day after the server maker and Nvidia partner reduced its sales outlook as some customers delayed making product decisions amid economic uncertainty.

• The company said Tuesday it now expects fiscal 2025 revenue of $21.8 billion to $22.6 billion, down from its prior range of $23.5 billion to $25 billion.

• Citi and JPMorgan analysts cut their price targets on the stock.

Super Micro Computer (SMCI) shares sank 6% in premarket trading Wednesday, a day after the server maker and Nvidia (NVDA) partner reduced its sales outlook as some customers delayed making product decisions amid economic uncertainty.

The company said in its fiscal third-quarter report Tuesday that it now expects full-year revenue of $21.8 billion to $22.6 billion, down from its prior range of $23.5 billion to $25.0 billion.

For its fiscal fourth quarter, Supermicro anticipates sales of $5.6 billion to $6.4 billion and adjusted earnings per share of 40 cents to 50 cents, both well below Visible Alpha expectations. CEO Charles Liang said some customers were delaying commitments amid "economic uncertainty and tariff impacts."

JPMorgan analysts kept their "neutral" rating on the stock but trimmed their price target to $35 from $36. They said they had expected "a sharper rebound in earnings through both revenue and margins," adding that Supermicro continues to face "lower cost inventory related headwinds."

Citi analysts cut their price target on the stock to $37 from $39 but also maintained a "neutral" rating. Supermicro's "below consensus outlook" for the fourth quarter "implies the pushouts in revenues resulting from customers awaiting next generation GPUs will take more than a quarter to resolve, further exacerbating investor concerns on competitive dynamics, GPU allocation, visibility and AI lumpiness," the analysts wrote.

Super Micro Computer shares entered Wednesday up 8% so far this year.

Read the original article on Investopedia