Why Super Micro Computer Stock Fell In December

Core Insights - Super Micro Computer's shares fell by 13.5% in December, reflecting a broader pessimism in the AI infrastructure market [1] - The stock has seen a nearly 1,000% increase over the past five years but has experienced a decline over the last 12 months [2] Company Overview - Super Micro Computer assembles advanced computer chips into supercomputers for data center providers, positioning itself between major chipmakers like Nvidia and AMD and cloud companies such as Amazon and Microsoft [3] - The company reported revenue of $21 billion over the last twelve months, but growth has started to slow, partly due to anticipation of new Nvidia products [4] Market Concerns - There are concerns about the pace of AI infrastructure development by startups like OpenAI and Anthropic, which could impact demand for Super Micro's services [5] - An oversupply of computer chips in the AI data center market could lead to reduced demand for Super Micro Computer's offerings [5] Financial Metrics - Super Micro Computer has a market cap of $18 billion, with a projected revenue of $36 billion for fiscal year 2026, but operates with a slim gross profit margin of 10%-15% [7] - The company's net income over the last twelve months was just under $800 million, resulting in a trailing price-to-earnings ratio (P/E) of 24 [8] Future Outlook - Despite strong growth guidance for 2026, Super Micro Computer faces risks associated with a potential downturn in AI spending [9] - The stock may appear undervalued, but it carries significant risks for investors at this time [9]