Super Micro Computer (SMCI) stock dropped nearly 6% midday Wednesday after the company lowered its full-year revenue outlook, citing economic uncertainty amid President Trump’s trade war and fierce competition from other AI server makers.
Super Micro said on Tuesday that it expects its full-year revenue for 2025 to fall between $21.8 billion and $22.6 billion, down from its prior guidance of $23.5 billion and $25 billion.
CEO Charles Liang told analysts in a call following the company’s third quarter earnings results that tariffs and macroeconomic uncertainty “concern” some customers and make it difficult to forecast the adoption of its technology. Super Micro’s servers contain Nvidia’s (NVDA) AI chips and are used in data centers to power artificial intelligence.
Read more about Super Micro Computer’s stock moves and today’s market action.
The company is based in the US but also has manufacturing facilities in Taiwan and the Netherlands, which are subject to Trump’s new 10% global tariffs. The president is also pursuing tariffs on semiconductors, key components in Super Micro’s servers.
CFO David Weigand said that given the current “dynamic environment,” the company expects gross margin, a measure of profitability, to be approximately 10%. Super Micro’s gross margin was just over 14% in its fiscal year 2024 (ended June 30) and 18% in 2023.
Weigand later added that in addition to uncertainty clouding the company’s outlook, an industrywide shift toward servers that use Nvidia’s (NVDA) latest AI Blackwell graphics processing units (GPUs) also brought more price competition to the server market.
During the earnings call, Super Micro avoided questions from analysts about whether its aggressive financial targets for 2026 still stand under the current economic landscape. Liang had said in February that Super Micro could potentially reach $40 billion in revenue next year, sending the stock soaring.
Read more: The latest news and updates on Trump’s tariffs
But on Tuesday, CFO Weigand declined to confirm the outlook, pointing to tariffs and economic uncertainty.
Liange, however, said, “We believe our business will continue to grow much faster in the coming quarters.”
Super Micro had previously moderated expectations ahead of its third quarter earnings report, lowering its projected range for its financial results for the March period in a regulatory filing last week. The update sent the stock plummeting 11.5% the following day.
The company’s third quarter earnings missed the mark but fell within the updated range provided by the server maker April 29.
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