🚨 Super Micro Computer Plummets 23% Despite Beating EPS — Is Wall Street Punishing Growth?
Shares of AI Darling SMCI Nosedive After Earnings: What’s Really Going On?
Super Micro Computer (SMCI), a key player in the AI server market, is taking a beating on Tuesday. Shares are down more than 23% even after the company reported Q4 EPS of $4.59, above the $4.51 consensus, and revenue of $5.47 billion, just slightly below the $5.45 billion consensus.
Despite the relatively solid results, investors were clearly spooked. The culprit? Guidance.
Supermicro expects Q1 revenue between $2.9B and $3.2B, well below analysts' expectations of $3.9B. For fiscal 2025, SMCI sees revenue between $14.3B and $14.7B, while Wall Street was anticipating $16.2B.
That guidance cut is raising red flags. Wall Street was pricing in a continuation of massive AI-fueled growth. A 23% drop shows just how much perfection was baked into this stock. The fact that the company beat earnings and still tanked underscores the unforgiving nature of high expectations.
SMCI’s valuation had surged on AI hype, becoming a retail favorite after riding Nvidia’s coattails. But Tuesday’s reaction shows the market is no longer buying the "infinite upside" narrative unless companies deliver and raise guidance.
This is a cautionary tale for anyone chasing AI stocks without checking if expectations are already priced for perfection.
