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Super Micro Sales Fail to Clear High Investor Expectations

(Bloomberg) — Super Micro Computer Inc. reported quarterly sales that tripled from the same period last year but fell slightly short of estimates, disappointing investors who had sky-high expectations that the server maker’s business would benefit from AI-related demand.

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Revenue in the fiscal third quarter, which ended March 31, climbed to $3.85 billion, the company said Tuesday in a statement. That’s just below the consensus estimate of $3.86 billion, according to data compiled by Bloomberg. Profit, excluding some items, was $6.65 per share, ahead of the $5.58 expected by Wall Street analysts.

A jump in demand for the equipment that powers artificial intelligence training and applications has helped drive sales at Super Micro, which makes data center servers. Growth rates at the San Jose, California-based company have climbed higher in recent quarters on the back of deals with large corporations and an improving supply of high-powered chips.

Tuesday’s results weren’t enough to advance the hype. The shares dropped about 13% in extended trading after closing at $858.80 in New York. The company has more than tripled in value this year and been added to the S&P 500 Index. Still, the stock had declined about 25% since a peak in March after the company announced a share sale to raise as much as $2 billion.

Chief Executive Officer Charles Liang said in the statement that the company should “continue gaining market share” as new products are released. He added that many of the tools are designed to support recent Nvidia Corp. technology.

Speaking on a conference call after the results were released, Chief Financial Officer David Weigand said improving supply chains and new products should help fuel strong growth.

A major point of investor caution is whether Nvidia, the world’s most valuable chipmaker, will cut into Super Micro’s revenue as the semiconductor giant invests in new business lines, wrote George Wang, an analyst at Barclays, in a note before the results were released.

Revenue in the quarter ending in June will be $5.1 billion to $5.5 billion, the company said. Analysts, on average, projected $4.73 billion, according to data compiled by Bloomberg. Profit, excluding some items, will be as much as $8.42 per share, compared with an average estimate of $6.97.

(Updates with comments from CFO in the sixth paragraph.)

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