Super Micro shares plunge 30% due to lack of earnings and auditor turmoil

The auditor's resignation and disappointing financial results for the first quarter of fiscal 2025 caused Super Micro Computer's (SMCI, Financial) stock price to plunge 30%. This sharp decline was exacerbated by the company downgrading its future financial outlook and failing to meet investor expectations. The San Jose-based server maker also said in its earnings report that an audit of its accounting procedures found no fraud. However, this did not ease worries as the company admitted it had no idea when it would be able to deliver its annual report following the resignation of its auditor last week.

After-hours trading brought the price down to $21.42, a significant further decline of 15.5% from the post-earnings announcement decline. Super Micro forecast second-quarter net sales of $5.5 billion to $6.1 billion, a significant decline from analysts. With an average estimate of $6.86 billion, LSEG has it all. The profit estimate also fell. For the new year, the company estimated profit of 48 cents to 58 cents per share, compared with market expectations of 75 cents per share.

While Super Micro faces these challenges, the company is well positioned in the technology market through partnerships with specialized cloud computing providers such as CoreWeave. These vendors have struck deals and optimized Nvidia chips for such artificial intelligence-related operations. Addressing investors, CEO Charles Liang said at a conference that he is very confident about the existence of the Super Micro's computer servers, which will be based on Nvidia's latest chips, adding that the company will increase the share of Nvidia chips , who owns it, will not jeopardize planned to buy.

This article first appeared on GuruFocus.