Super Micro’s Stock Tumbles, Nvidia’s Influence Looms Large
Super Micro Computer Inc. (SMCI) experienced a significant drop in its stock, plummeting 15% in after-hours trading on April 30, 2025, following a disheartening pre-announcement concerning its fiscal third-quarter performance. The decline can be partially attributed to a troubling transition phase to newer Nvidia Corporation (NVDA) chips, which has led to delayed customer platform decisions and a shortfall in revenue and earnings expectations.
Shocking Revenue Forecast Adjustment
In its announcement, Super Micro projected revenue for the March quarter to be between $4.5 billion and $4.6 billion, falling short of previous forecasts of $5.0 billion to $6.0 billion. The company also revised its expectations for adjusted earnings per share downwards to a range of 29 cents to 31 cents, which is a sharp contrast to the original target of 42 cents to 62 cents. This significant change in outlook caught analysts off guard, especially considering that the consensus among Wall Street experts was a predicted revenue of $5.4 billion and earnings per share of 53 cents.
Inventory Reserves to Blame
Super Micro attributed the disappointing results to “higher inventory reserves” stemming from older-generation products. This suggests a potential inventory write-down due to an accumulation of older Nvidia GPUs, particularly the Hopper family, which has been somewhat overshadowed by the launch of Nvidia’s new Blackwell product family that is tailored for advanced AI computing. With Blackwell reportedly selling out quickly upon release, Super Micro is struggling with an inventory surplus of less desirable products.
Customer Transitioning Delays
The gradual shift in customer preference towards Blackwell products is echoed in a note from Evercore ISI analysts. They highlighted that Super Micro has observed order delays as clients opt for next-generation solutions over current offerings. Given that the company has a notable stock of Hopper products, this trend raises concerns regarding excess inventory and delayed sales. Evercore ISI’s commentary aligns with observations from Hewlett Packard Enterprise Co. (HPE), whose executives remarked on a similar pattern within their earnings call, acknowledging that a considerable portion of their AI server revenues was driven by Blackwell-based products.
Market Reaction and Future Prospects
The immediate response from the market reflects investors’ apprehension regarding Super Micro’s potential for recovery. Shares of Super Micro have seen a rollercoaster ride in 2025, initially surging to approximately $97.67 in February, but are now trading down nearly 70% from that peak following the latest news. Despite this downturn, it is noteworthy that Super Micro stocks remain up about 18% year-to-date as of the report.
Looking ahead, Super Micro is set to release its fiscal third-quarter results on May 6, which will offer further insight into their financial standing and strategies moving forward. As the tech landscape rapidly evolves and competition intensifies, the company’s ability to adapt to customer preferences and effectively manage its inventory will be critical in determining its future performance.
Conclusion
Super Micro’s recent struggles underline the broader challenges faced by technology companies navigating rapid transitions in production and inventory management. The market’s reaction demonstrates the high stakes involved in aligning product lines with changing consumer demands—especially in fast-growing sectors like AI. As Nvidia continues to charge ahead with innovations, Super Micro must navigate its weaknesses and leverage opportunities to avoid further declines in its stock performance.
For more information about Super Micro and Nvidia, please visit their respective [websites](https://www.supermicro.com) and [Investor Relations page](https://www.nvidia.com/en-us/investors/).
