Why Super Micro Computer Stock Crashed and Burned Wednesday Morning
The past year has seen an extraordinary run for high-end server and storage solution specialist Super Micro Computer (NASDAQ: SMCI), also known as Supermicro. Prior to the company's latest quarterly report, which it released after the market close on Tuesday, the stock had gained more than 700% over the past year, driven higher by accelerating demand for artificial intelligence (AI) systems and the hardware to power them.
However, gravity may have finally caught up with Supermicro. Despite robust results and increased guidance, investors engaged in a round of profit-taking Wednesday morning that drove the stock down by as much as 18.5%. As of 11:50 a.m. ET, the stock was still down by 15.8%.
In its fiscal 2024 third quarter, which ended March 31, Supermicro's revenues surged 200% year over year to $3.85 billion. Expanding profit margins sent even more to the bottom line: Adjusted earnings per share (EPS) soared by 308% to $6.65. Analysts' consensus estimates were calling for revenue of $3.95 billion and EPS of $5.78, so while profits were stronger than expected, sales were a little shy of expectations.
Source Fool.com
