Super Micro plunges ahead of third-quarter earnings later this month

Nvidia shares fell 10% during trading on Friday, the worst day for the GPU maker since March 2020, when the chipmaker’s value was just one-twelfth of its current $1.9 trillion market cap.

Nvidia and its rivals did not seem to make any announcements Friday that could have sent shares plunging. But Super Micro Computer, one of the companies that build Nvidia-based servers, saw shares drop 23% Friday after the company said it would report earnings later this month, breaking from its recent pattern of providing preliminary results.

In recent quarters, including the year-ago period, Super Micro had pre-announced strong sales and earnings. In January, Super Micro increased its sales and earnings guidance 11 days before announcing second-quarter financials. Super Micro will report fiscal third-quarter results on April 30.

Super Micro Computer, like Nvidia, has seen its sales skyrocket in recent years on the back of insatiable demand for Nvidia-based computers that are used to build artificial intelligence programs like ChatGPT.

In addition to Super Micro and Nvidia, which had the worst two performances in the S&P 500 on Friday, investors scaled back their holdings of many semiconductor stocks ahead of earnings later this month.

The chip-focused VanEck Semiconductor Index fell 4.5%, and Arm shares fell 17% on Friday. Arm sells a kind of intellectual property for chips that is seen as complementary to Nvidia graphics processor-based AI servers. AMD, which is Nvidia’s primary GPU competitor, saw shares fall 5%.

Shares of Super Micro, which joined the S&P 500 in March, are still up about 151% this year after climbing 246% in 2023. The stock’s move on Friday was its steepest drop since Aug. 9, 2023, when it fell 23.4%. Nvidia shares are up over 58% so far in 2024.

While Super Micro is getting a big boost from its ties to Nvidia, the market remains highly contested, with competitors including Dell and Hewlett Packard Enterprise planning to build systems using Nvidia’s latest generation of Blackwell graphics processing units.