Sharp Decline in Super Micro Computer Inc.'s Shares

Super Micro Computer Inc. (SMCI) experienced a dramatic drop in its share price this Wednesday, following the company's announcement of significantly reduced revenue and earnings forecasts for the third quarter. This news led to an early trading sell-off, with shares plummeting nearly 20%.

Revised Financial Forecasts

The server maker now anticipates revenue to fall between $4.5 billion and $4.6 billion, a stark contrast to its previous projection of $5 billion to $6 billion. Similarly, adjusted earnings per share are expected to range from $0.29 to $0.31, down from the earlier forecast of $0.46 to $0.62.

Reasons Behind the Shortfall

Super Micro attributes this unexpected downturn to a combination of delayed customer orders and escalating inventory costs. At its lowest point during the day, the company's shares were down by 19.13%, trading at $29.12 by 9:36 am ET.