Supermicro stock plummets as Q1 earnings, revenue fall short of Wall Street estimates

Core Viewpoint - Supermicro's stock experienced a decline of over 8% following the release of its first-quarter fiscal year 2026 results, which fell short of Wall Street expectations in both revenue and earnings [1][2]. Financial Performance - The company reported first-quarter revenue of $5.02 billion, a decrease from $5.94 billion in the same period last year, and below the analyst expectation of $6.09 billion [1]. - Adjusted earnings per share were $0.35, lower than the projected $0.41 but an increase from $0.07 in the first quarter of fiscal year 2025 [2]. Earnings Trends - This report marks the sixth consecutive quarter where Supermicro's earnings and revenue have not met analyst estimates [2]. Investor Expectations - Prior to the earnings report, Supermicro had already lowered its revenue outlook for the first quarter to $5 billion from a previous range of $6 billion to $7 billion, attributing this adjustment to delays in revenue from product design upgrades [3]. Market Position - Supermicro designs AI servers utilizing Nvidia chips and was an early participant in the AI market, which previously contributed to significant stock price increases during the AI boom [4]. Regulatory and Compliance Issues - The company has faced scrutiny following a report by Hindenburg Research, which accused it of accounting and export control violations, leading to delays in its SEC filings and the resignation of its accountant, raising the risk of Nasdaq delisting [5]. Competitive Landscape - Increased competition in the AI server market has raised concerns regarding Supermicro's long-term profitability, with the stock showing volatility throughout 2024 but having risen over 50% this year [6].