SMCI: Preliminary Results Disappoint

Here's our initial take on Super Micro's preliminary results.

Key Metrics

Sales and Profits Tumble

Super Micro Computer (NASDAQ: SMCI) released preliminary results for the third quarter of fiscal 2025 on Tuesday afternoon, disclosing that it would fall well short of its previous guidance. The company now expects to generate revenue between $4.5 billion and $4.6 billion, still up on a year-over-year basis but far below its previous outlook of $5 billion to $6 billion.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

The company also slashed its outlook for GAAP and non-GAAP earnings per share. GAAP EPS is now expected between $0.16 and $0.17, down from a previous range of $0.36 to $0.53. Non-GAAP EPS is expected between $0.29 and $0.31, compared with prior guidance of $0.46 to $0.62.

Super Micro blamed delayed customer platform decisions that shifted sales into the fourth quarter for the revenue shortfall. The company expects its gross margin to dip 220 basis points from the second quarter due to charges related to older inventory and costs to expedite time-to-market for new products. Super Micro noted that design wins for new-generation products have been robust.

Immediate Market Reaction

Shares of Super Micro were down about 17% in after-hours trading Tuesday as investors digested the bad news. The big revenue and profit miss, plus the lack of a complete earnings release, gave investors plenty to worry about. As of market close Tuesday, Super Micro stock was down 70% from its all-time high reached in early 2024.

What to Watch

Super Micro's unexpected slowdown in its fiscal third quarter is timed with other developments in the AI infrastructure market. Both Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) have reportedly pulled back on data center leases, which raises questions about the durability of demand for AI servers. With Super Micro writing down older inventory and rushing new products to market, the company's customers may be more cautious given the shaky economic environment.

Super Micro didn't provide a date for its full third-quarter report.

Helpful Resources

• Preliminary report
• Investor relations page
• Additional coverage

Should you invest $1,000 in Super Micro Computer right now?

Before you buy stock in Super Micro Computer, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Super Micro Computer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $607,048!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $668,193!*

Now, it’s worth noting Stock Advisor’s total average return is 880% — a market-crushing outperformance compared to 161% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.