Super Micro Computer earnings

Super Micro Computer's shares plunged over 13% in extended trading after the company reported disappointing quarterly earnings, revealing adjusted gross margins below analysts' expectations due to high costs associated with transitioning to more expensive AI chips. Despite a strong revenue outlook, analysts expressed concerns over the company's declining margins and a muted profit forecast, with Barclays noting the stock's recent correction made it more reasonably valued. The company's gross margin fell to 11.3%, significantly lower than the expected 14.1%, leading to a wave of sell-offs in related chipmaker stocks like Nvidia and AMD. Super Micro also announced a 10-for-1 stock split effective October 1, as it navigates the challenges posed by competitive pricing and production costs. Analysts remain cautious, describing the situation as a 'show-me' story while predicting potential margin recovery by 2025. The stock's recent performance reflects a broader market reckoning in technology stocks amid concerns over AI infrastructure costs.