Server maker Super Micro Computer Inc.’s stock took a nosedive in extended trading today after the company missed expectations with its first-quarter results.

The company’s stock fell more than 9% after it reported earnings before certain costs such as stock compensation of 35 cents per share, trailing Wall Street’s 40-cent-per-share forecast. Revenue also came up light, declining 15% from a year earlier, to $5.02 billion, well below the Street’s target of $6 billion.

The decline in revenue meant Supermicro’s profit also took a hit. It reported net income of just $168.3 million, down from $424.3 million in the year-ago period.

The miss wasn’t a massive shock, as Supermicro preannounced its results last month, saying it had revised its revenue forecast to $5 billion, down from a previous range of $6 billion to $7 billion. In that partial report, the company explained that certain “design win upgrades” had pushed some of its anticipated first-quarter revenue into the second quarter.

As a result, Supermicro’s revenue forecast for the current quarter looks good. It expecting sales of between $10 billion and $11 billion, far ahead of the Street’s $7.83 billion target. However, the company said it’s still likely to come up short on profit. It’s forecasting an adjusted profit of 46 to 54 cents per share, trailing Wall Street’s estimate of 61 cents.

Supermicro sells servers powered by graphics processing units from Nvidia Corp., widely used to support artificial intelligence workloads. The company was one of the first beneficiaries of the AI boom, and its stock surged to record highs by early 2024.

However, things have gone a bit pear-shaped since then. The company has been in the spotlight in the wake of a scathing report from the short-seller Hindenburg Research that was released in mid-2024. That report accused the company of accounting violations and subverting export controls, and it consequently delayed filing its quarterly and annual financial reports to the U.S. Securities and Exchange Commission.

Its main accountant also resigned, and for a time there were real fears it might be delisted from the Nasdaq exchange. It finally filed its late reports in February, just one day before a deadline expired, to avoid that fate.

So far, no one has been charged with any wrongdoing and it looks as if the company may avoid any further scrutiny. But in the meantime, it has come under pressure from rival server makers, which has squeezed its margins and profitability. It’s believed to have lost significant market share to competitors such as Dell Technologies Inc. and Hewlett Packard Enterprise Co.

Still, Supermicro Chief Executive Charles Liang (pictured) did have something positive to say today. In a statement, he said the company was raising its full-year revenue forecast. “With a rapidly expanding order book, including more than $13 billion in Blackwell Ultra orders, we expect at least $36 billion in revenue for fiscal year 2026,” he promised.

That number is at the minimum of its forecast range, but it didn’t say what the upper end was. However, it represents a significant jump from the company’s prior outlook of at least $33 billion, and is well above Wall Street’s consensus estimate of $32.25 billion. Even so, investors still have questions about the company’s profitability, and Supermicro declined to provide any guidance on earnings, which is something that likely weighed on its stock after-hours.

Supermicro’s stock has been volatile this year, vulnerable to wild swings depending on which way the wind appears to be blowing, yet it remains up more than 55% in the year to date.

Photo: Supermicro