Nvidia Corporation isn’t producing enough artificial intelligence chips to satisfy its buyers’ demand, according to a company that uses the chips in its servers.
Super Micro Computer, a company that heavily relies on Nvidia hardware, blamed “key components supply shortages” for disappointing revenue guidance posted Tuesday evening.
CEO Charles Liang said Super Micro was doing everything but begging Nvidia for more AI chips when asked about a delay between when Nvidia realizes revenue and when equipment manufacturers do on the company’s earnings call.
“We believe their capacity [is] growing and that’s why we talk to them every day, asking for more,” Liang said. “So hopefully we can gather more support from them and hopefully their capacity grows more quickly.”
Super Micro shares pungled nearly 24% on Wednesday, but investors pointed the finger at Nvidia too, sending its stock down 4.7%.
Nvidia is scheduled to report results after the bell on August 23.
The major decline reflects the pitfalls of hyper-inflated share valuations amid the artificial intelligence (AI) hype machine.
Despite the Californian IT solution provider’s share price falling sharply, its fourth-quarter financial results were objectively decent.
The company reported net sales of US$2.18 billion, marking a rise from US$1.28 billion in the previous quarter and US$1.64 billion year-on-year.
Gross margins stood at 17.0%, slightly down from 17.6% in both the third quarter of 2023 and the same period last year.
Net income for the quarter reached US$194 million, more than double the US$86 million of the preceding quarter and higher than the US$141 million from the same quarter of the previous year.
As of June 30, the company's cash position was robust, with cash and cash equivalents totalling US$440 million, offset by a bank debt of US$290 million.
For the entire fiscal year 2023, Supermicro's net sales amounted to US$7.12 billion, up from US$5.20 billion in 2022. The net income for the year was reported at US$640 million, a sharp increase from the previous year's US$285 million.
Looking forward, the company is projecting net sales to be in the ballpark of US$9.5 billion to US$10.5 billion for the whole of 2024.
All of this wasn’t good enough to please investors though, who were apparently hoping for a strong AI sales forecast that failed to materialise.
Despite being knocked 15% lower to US$295.99, Supermicroshares remain over 300% higher year to date on a 30-times price-to-earnings ratio, making the shares considerably more expensive than the Nasdaq average.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel