Supermicro (SMCI) stock dropped more than 9% in extended trading Tuesday as the AI server maker reported revenue and earnings for the first quarter of its 2026 fiscal year that fell below Wall Street’s expectations.
The company reported revenue of $5.02 billion for the first quarter, down from $5.94 billion during the year-ago period and less than the $6.09 billion expected by analysts, according to Bloomberg consensus estimates.
Supermicro’s adjusted earnings per share of $0.35 was also lower than the $0.41 projected by analysts, but an increase from $0.07 in the first quarter of its 2025 fiscal year.
Tuesday’s report marked the sixth consecutive quarter that Supermicro’s earnings and revenue have fallen short of analyst estimates, per Bloomberg data.
Supermicro had already moderated investor expectations ahead of its first quarter results. The company lowered its first quarter revenue outlook in late October to $5 billion from its previous range of $6 billion to $7 billion. It explained the change by saying its recent product design upgrades pushed back some of the revenue it expected to see in the first quarter to the second quarter.
Supermicro designs AI servers equipped with chips from Nvidia (NVDA). The company was an early mover in the AI market, which helped fuel its stock to new highs amid the AI boom.
The server maker has been in the spotlight since a scathing report by short-selling firm Hindenburg Research, released in the summer of 2024, accused the company of accounting and export controls violations. The report led to Supermicro delaying its quarterly and annual filings to the Securities and Exchange Commission, and its accountant resigned, putting it at risk of being delisted by the Nasdaq — a risk it narrowly avoided this past February.
Rising competition in the artificial intelligence server market has also raised questions about Supermicro’s long-term profitability.
The stock was volatile throughout 2024. It’s up more than 50% this year.
Shares fell more than 6% during Tuesday’s trading session before the after-hours decline.
