Supermicro Faces Sharp Decline as AI Demand Cools

Super Micro Computer Inc. (SMCI) experienced a significant drop in its stock price early Wednesday, following a drastic revision of its third-quarter revenue and earnings forecasts. The announcement led to a nearly 20% decline in shares during early trading hours.

Revised Forecasts Signal Troubling Trends

The server manufacturer now anticipates revenue to fall between $4.5 billion and $4.6 billion, a stark contrast to its previous expectations of $5 billion to $6 billion. Similarly, adjusted earnings per share are projected at $0.29 to $0.31, down from earlier estimates of $0.46 to $0.62. Super Micro attributes this downturn to postponed customer orders and escalating inventory expenses.

Market Reaction and Share Performance

By 9:36 am ET, Super Micro's shares had plummeted by 19.13%, trading at $29.12, marking a significant intraday low. This development underscores the challenges the company faces in a rapidly evolving market landscape.