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Investing.com -- Analyst Ming-Chi Kuo from TF International Securities commented today on Super Micro’s (NASDAQ:SMCI) preliminary results, indicating that the company’s quarterly numbers are likely to remain under pressure.
Super Micro’s business primarily revolves around AI servers, which are divided into three main types: ASICs, such as Google (NASDAQ:GOOGL) TPU servers, Nvidia’s GB200/300 NVL72, and lower-end Nvidia (NASDAQ:NVDA) servers like the HGX series. The growth in this sector is mainly driven by ASICs and NVL72, predominantly from CSP demand.
In the first half of 2025, Super Micro’s shipments will be focused on Nvidia’s lower-end servers. The company’s key customers are not CSPs, and as Kuo previously noted, Super Micro is not a top-tier NVL72 assembler. Because of this, the company’s preliminary results do not reflect the overall trends in the AI server industry. Their product mix and customer base aren’t representative of the industry as a whole. However, the weak results are expected to impact the short-term sentiment in the AI server supply chain.
Super Micro has mentioned delays in purchasing, which Kuo believes are likely due to the transition from HGX Hopper to Blackwell. Additionally, a potential delay in purchasing could hit this quarter due to the shift from B200 to B300.
The company also noted an increase in older GPU inventory, which likely refers to the Hopper series. Geopolitical factors could slow down Super Micro’s Hopper shipments, negatively affecting this quarter’s results, unless there is a significant increase in Blackwell shipments.
Super Micro yesterday revised its net sales expectations for the quarter to $4.5-$4.6 billion, a decrease from its previous estimate of $5-$6 billion and the consensus of $5.41 billion. It also lowered its non-GAAP EPS for the quarter to $0.29-$0.31, down from its prior view of $0.46-$0.52 and the consensus of $0.54.
Despite the company reporting "robust" new-generation product design wins, some delayed customer platform decisions have pushed sales into Q4. The server maker also stated that Q3’s GAAP and Non-GAAP gross margin was 220 basis points lower than Q2, mainly due to higher inventory reserves from older generation products and expedite costs to bring new products to market faster.
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