Super Micro Computer Inc. SMCI reported a challenging fourth quarter for fiscal year 2025, with management attributing a decline in earnings per share primarily to the impact of tariffs imposed by President Donald Trump.
Check out the current price of SMCI stock here.
What Happened: Despite the weak financial results, the company is strategically mitigating future risk by leveraging its diversified global supply chain, a critical move as it positions itself at the heart of the booming AI infrastructure market.
During the earnings call, CEO Charles Liang directly addressed the issue, stating that non-GAAP earnings per share were “down year over year… primarily due to the tariff impact.”
The significance of this comment becomes clear when viewed alongside the company’s core business. The CFO, David Wiegand, noted that demand for “next-generation air-cooled and liquid-cooled GPU AI platforms… represented over 70% of Q4 revenues.”
By linking the tariff impact to the company’s overall financial performance and noting that the majority of its business is AI-related, the earnings call implied the direct threat tariffs pose to the AI supply chain.
In response to these challenges, Supermicro is highlighting its robust manufacturing presence in key global regions.
Liang emphasized that the company’s “large and versatile manufacturing campus across the U.S., Taiwan, Malaysia and the Netherlands” enables it to “respond to dynamic regional demands, support cost sensitive customers… mitigate tariff exposure, and maintain a reliance global supply chain.”
This strategy is designed to make the company more resilient to geopolitical trade fluctuations.
Looking forward, the company remains optimistic about its long-term strategy and growth. Liang projects “at least $33 billion total revenue” for fiscal year 2026, supported by its expanding customer base and the introduction of its new higher-margin “data center building block solution” (DCBBs).
These solutions, along with a focus on the enterprise, IoT, and telco markets, are expected to gradually improve gross margins and lessen the dependence on high-volume, lower-margin business.
Why It Matters: SMCI reported a fourth-quarter net sales of $5.76 billion, up from $4.6 billion in the previous quarter and $5.4 billion in last year’s fourth quarter. However, it missed the consensus estimate of $5.88 billion.
The earnings per share of $0.41 missed the Street consensus estimate of $0.44.
Price Acton: On Tuesday, the SMCI stock dropped 16.29% after-hours following its earnings results. The stock has surged by 90.55% year-to-date but is down 7.18% over the past year.
Benzinga’s Edge Stock Rankings indicate that SMCI maintains a strong price trend across the short, medium, and long term. However, the stock scores moderately on value rankings. Additional performance details are available here.
Price Action: The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, declined on Tuesday. The SPY was down 0.51% at $627.97, while the QQQ declined 0.68% to $560.27, according to Benzinga Pro data.
On Wednesday, the futures of Dow Jones, S&P 500, and Nasdaq 100 indices were trading higher.
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