What happened
Shares of Super Micro Computer (SMCI -0.15%) were down 21.6% as of 1:30 p.m. EDT Wednesday, according to data provided by S&P Global Market Intelligence, after the company's strong fiscal fourth-quarter results were overshadowed by conservative forward guidance.
On the former, Super Micro's quarterly net sales climbed 32.9% year over year to $2.18 billion, translating to a 34% increase in adjusted (non-generally accepted accounting principles, or non-GAAP) net income of $3.51 per share. Analysts, on average, were modeling revenue of $2.08 billion and adjusted earnings of $2.96 per share.
So what
"We continue to see unprecedented demand for AI and other advanced applications requiring optimized rack-scale solutions," stated Super Micro CEO Charles Liang. "We are in a great position to continue our growth momentum given our record new design wins, customers, and backlog for our best-in-class rack-scale Total AI & IT Solutions."
Indeed, Super Micro stands tall as a key beneficiary of the rise of generative artificial intelligence (AI), and shares are still up around 225% year to date, even after today's decline.
Now what
Keeping in mind Super Micro's new fiscal year ends on June 30, 2024, the company issued guidance for (current) fiscal first-quarter net sales of $1.90 billion to $2.20 billion and adjusted earnings per share of $2.75 to $3.50. By contrast, most analysts on Wall Street were looking for fiscal Q1 revenue of $2.15 billion and adjusted earnings of $3.22 per share -- both well above the midpoints of SMCI's guidance range.
For the full fiscal year 2024, it expects net sales of $9.5 billion to $10.5 billion, with the midpoint again below consensus estimates for fiscal 2024 net sales of $10.31 billion.
Of course, we should also note Super Micro Computer has a habit of underpromising and overdelivering. But given its exceptional rally so far in calendar year 2023, it's hardly surprising to see the stock pulling back as investors worry about its seemingly light forward outlook.
