Core Insights - The article discusses the role of James Foord as an economist and his leadership in The Pragmatic Investor, which focuses on building diversified investment portfolios to preserve and increase wealth [1] Group 1: Company Overview - The Pragmatic Investor is an investing group that covers various sectors including global macro, international equities, commodities, technology, and cryptocurrencies [1] - The group aims to guide investors of all levels through features such as a dedicated portfolio, weekly market updates, actionable trades, technical analysis, and a chat room for discussions [1]

Core Viewpoint - Super Micro Computer (SMCI) shares experienced a significant decline following the announcement of its lowest-ever gross margin at 9.3% and missed earnings estimates for the fiscal first quarter [1][5]. Financial Performance - The company reported a gross margin of 9.3%, which is the lowest in its history [1]. - Supermicro's inventory at the end of Q1 reached $5.7 billion, a substantial increase from $4.7 billion in the same quarter last year, indicating slower sales [3]. - The stock has dropped approximately 30% from its peak in July [2]. Market Sentiment - There is a growing concern regarding the company's ability to compete with rivals like Dell and HPE in the AI server market, leading to a negative outlook for long-term investment [5]. - The short interest in Super Micro stock has risen to about 14%, indicating bearish sentiment among investors [4]. - Wall Street currently rates Super Micro Computer at 'Hold', with expectations of potential price target reductions following disappointing earnings [7][8]. Competitive Position - The company is struggling to keep pace with competitors in the AI server space, raising doubts about its future performance [5]. - The overall sentiment in the market suggests that there are more attractive investment opportunities in the AI sector than SMCI [6].

Core Viewpoint - Super Micro Computer (SMCI) experienced a significant decline in stock price following disappointing fiscal first-quarter results, raising concerns about profitability despite strong demand for AI hardware [1][5]. Financial Performance - The company reported revenue of $5.02 billion, falling short of the $5.80 billion expected by analysts, marking a 15% decrease from $5.94 billion a year earlier [3][5]. - Adjusted earnings per share were $0.35, missing forecasts of $0.39, indicating the sixth consecutive quarter of earnings shortfalls [3][5]. - Net income nearly halved to $168.3 million from $424.3 million, reflecting significant margin pressures [5]. Market Context - Super Micro has been a key player in the AI boom, particularly benefiting from high-performance servers paired with Nvidia GPUs, but growth momentum has recently slowed [6]. - Competitors like Dell are reportedly gaining market share as Super Micro's growth flattens [6]. Future Outlook - Despite the weaker quarterly results, management remains optimistic, raising the full-year sales outlook to $36 billion from $33 billion, supported by new large-scale deals related to Nvidia-powered AI systems [7].

Core Viewpoint - Super Micro Computer (SMCI) experienced a significant decline in stock price following disappointing fiscal first-quarter results, raising concerns about profitability despite strong demand for AI hardware [1][5]. Financial Performance - The company reported revenue of $5.02 billion, falling short of the $5.80 billion expected by analysts, marking a 15% decrease from $5.94 billion a year earlier [3][5]. - Adjusted earnings per share were $0.35, missing forecasts of $0.39, representing the sixth consecutive quarter of earnings shortfalls [3][5]. - Net income nearly halved to $168.3 million from $424.3 million, indicating significant margin pressures as the company expands its product offerings and manufacturing capabilities [5]. Market Context - Super Micro has been a key player in the AI boom, benefiting from high-performance servers paired with Nvidia GPUs, but growth momentum has recently slowed [6]. - Competitors like Dell are reportedly gaining market share as Super Micro's growth flattens [6]. Future Outlook - Despite the weaker quarterly results, management remains optimistic, raising the full-year sales outlook to $36 billion from $33 billion, supported by new large-scale deals related to Nvidia-powered AI systems [7].

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

The SMCI stock price suffered a harsh reversal in the extended hours after the company published its financial results that missed analysts' estimates. It dropped by as much as 10% to $43.20, down by ... ...

Group 1 - Super Micro Computer (NASDAQ: SMCI) reported its Q1 FY26 earnings, raising its FY26 revenue outlook to $36 billion [1]

Core Insights - Super Micro Computer (NASDAQ: SMCI) has raised its FY26 revenue outlook to $36 billion following its Q1 FY26 earnings report [1] Company Summary - Super Micro Computer is a prominent player in the AI server market, indicating strong growth potential in this sector [1] Industry Context - The company operates within the technology sector, specifically focusing on artificial intelligence, which is a key area of growth in the current market landscape [1]

Market Overview - Following a sell-off, stocks are expected to see further downside in early trading, with S&P 500 futures down by 0.1 percent [1] - Concerns about valuations and a potential artificial intelligence bubble are contributing to weakness on Wall Street [1] Company Performance - Advanced Micro Devices (AMD) shares are down by 2.5 percent in pre-market trading despite better-than-expected third quarter results, as investors were disappointed by fourth quarter margin guidance [2] - Super Micro Computer (SMCI) shares are plunging by 7.6 percent after reporting fiscal first quarter results that missed expectations [2] - Arista Networks (ANET) is experiencing substantial pre-market weakness despite exceeding analyst estimates for third quarter results [3] Employment Data - The ADP report indicates that private sector employment in the U.S. rebounded by 42,000 jobs in October, following a revised loss of 29,000 jobs in September, surpassing economists' expectations of a 25,000 job increase [4] Economic Indicators - The Institute for Supply Management is set to release its report on service sector activity, with the services PMI expected to rise to 50.8 in October from 50.0 in September, indicating growth [5] Global Market Trends - Stock markets in the Asia-Pacific region mostly moved lower, with Japan's Nikkei 225 Index down by 2.5 percent and South Korea's Kospi down by 2.9 percent [7] - European markets are showing mixed performance, with the U.K.'s FTSE 100 Index up by 0.2 percent, while the French CAC 40 Index and the German DAX Index are down by 0.1 percent and 0.3 percent, respectively [7] Commodity Prices - Crude oil futures are slipping to $60.18 a barrel, while gold is trading at $3,987.10, up $26.60 from the previous session [8]

Core Viewpoint - Super Micro Computer (SMCI) has significantly underperformed in its earnings report, leading to a stock price decline of over 6% on the last trading day and an additional drop of nearly 10% in pre-market trading the following day [1]. Financial Performance - The company reported disappointing earnings, which has triggered a negative market reaction reflected in the stock price movements [1]. Market Reaction - The stock experienced a notable decline, with a drop exceeding 6% on the last trading day and an almost 10% decrease in pre-market trading the next day, indicating investor concern over the company's financial performance [1].