Super Micro Computer’s stock plummeted by as much as 23% on Friday amid investor concerns regarding the forthcoming earnings report’s strength. Although Super Micro Computer revealed plans to unveil its third-quarter earnings results on April 30, it opted not to preannounce earnings as it did for the second-quarter earnings in January.
Typically, companies issue preannouncements when results significantly exceed Wall Street consensus estimates. The absence of an earnings preannouncement from Super Micro Computer has sparked apprehension on Wall Street that the upcoming earnings report may not be as strong as the previous quarter’s, potentially falling short of analyst expectations.
According to Bloomberg, Wells Fargo Securities noted on Friday that Super Micro Computer’s failure to provide Wall Street with “a positive preannouncement” is being viewed as a negative development.
The company has witnessed remarkable growth over the past year, fueled by soaring demand for its AI-equipped servers. Having surged over 1,000% within a year, its stock was promoted from the small-cap Russell 2000 index to the S&P 500 earlier this year.
Super Micro Computer’s server solutions incorporate Nvidia chips, leading investors to extrapolate potential weakness in its upcoming earnings report to Nvidia as well. Consequently, Nvidia shares plunged by as much as 10%, resulting in a market capitalization decline of $183 billion.