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Super Micro Shares Fall After Forecasting Q4 Revenue Below Estimates Amid Tariff, Spending Concerns

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Super Micro Computer (SMCI.O), a leading AI server manufacturer, projected fourth-quarter revenue below Wall Street expectations, causing its shares to drop 5.4% in after-hours trading on Tuesday. The company cited economic uncertainty, tariffs, and delayed customer spending as near-term headwinds.

The San Jose-based firm forecast Q4 revenue between $5.6 billion and $6.4 billion, falling short of analysts’ average estimate of $6.82 billion, according to LSEG data. The company has benefited from surging demand for AI data center infrastructure, leveraging chips from Nvidia, AMD, and others, but has also faced accounting issues in recent months that sparked delisting concerns on the Nasdaq.

Despite some clients delaying purchases, Super Micro expects those deferred deals to materialize in the June–September quarter. However, investor sentiment remains cautious, particularly in light of growing concerns about AI investment slowdowns and tariff-related impacts.

Kim Caughey Forrest of Bokeh Capital Partners suggested the lowered guidance might be self-inflicted, rather than purely market-driven, while D.A. Davidson’s Gil Luria noted the possibility that Super Micro may be losing market share to competitors like Dell, rather than signaling a broader downturn in AI infrastructure demand.

For fiscal year 2025, Super Micro revised its revenue forecast downward to $21.8 billion to $22.6 billion, from a previously expected $23.5 billion to $25.0 billion.

The company had released preliminary results last week, but the lower guidance and uncertain macroeconomic environment continue to weigh on investor confidence.

Huawei Preparing to Ship New AI Chip as China Seeks Alternatives to Nvidia Solutions

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Huawei Technologies is set to begin mass shipments of its new 910C artificial intelligence chip to Chinese customers as early as next month, according to sources familiar with the matter. These shipments come at a crucial time, as China faces increasing challenges in securing domestic alternatives to Nvidia’s AI chips, which have been restricted due to escalating tensions between the U.S. and China. Some shipments of the Huawei 910C have already been made, with many Chinese AI companies eagerly awaiting a local solution to meet their growing demand for high-performance AI hardware.

The timing of the release is significant, as Chinese AI firms have been scrambling to find alternatives to Nvidia’s H20 chip, which had been widely used in AI development. Recently, the U.S. government announced that sales of the H20 to China would now require an export license, placing additional strain on Chinese tech companies that rely heavily on Nvidia’s advanced GPUs for AI research and deployment. With the Huawei 910C, China is looking to reduce its dependency on foreign technology, particularly in the critical area of AI chip development.

The Huawei 910C, which is a graphics processing unit (GPU), represents an evolution of the company’s previous offerings rather than a revolutionary breakthrough. The 910C combines two 910B processors into a single package using advanced integration techniques, delivering performance that rivals Nvidia’s H100 chip. This architectural design allows Huawei to provide a competitive product without entirely reinventing the wheel, making it an appealing alternative for AI applications in China. While the company has yet to publicly confirm the details of the chip’s capabilities or its shipment schedule, the timing aligns with the urgent need for domestic alternatives to Nvidia’s technology.

The geopolitical context behind the 910C’s development is important, as the U.S. has been restricting the sale of its most advanced AI products to China, citing national security concerns. In addition to the H20 chip, China has also been cut off from Nvidia’s flagship B200 chip, further intensifying the need for local solutions. As Huawei ramps up its efforts to ship the 910C, it is positioning itself as a key player in China’s push to maintain technological independence in the face of foreign restrictions.

Apple and Nvidia Receive Exemptions from US Tariffs, Easing Trade Pressure

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The Trump administration has granted a significant exemption from its reciprocal tariffs, which provides relief for major global tech manufacturers, including Apple and Nvidia. These exemptions, announced by US Customs and Border Protection, apply to a range of consumer electronics such as smartphones, laptops, hard drives, and memory chips. This move effectively narrows the scope of the tariffs, which had originally included a hefty 125 percent tariff on products from China, as well as a 10 percent baseline tariff on products from other countries. For tech companies and consumers alike, this offers a welcome reprieve, even though the exemptions may only be temporary.

The newly announced exclusions are a major win for the technology sector, especially considering that many of these devices are not manufactured domestically in the US. With products like iPhones, computers, and other essential electronics not being produced within the country, the tariffs had threatened to drive up prices for consumers. The decision to exempt these items comes at a crucial time when many had feared price hikes due to the escalating trade tensions. The exemption also provides some breathing room for companies like Apple and Nvidia, which have made significant financial commitments to the US in the past few months, further solidifying their importance in the tech landscape.

For consumers, the news is likely to ease concerns over rising prices. In anticipation of higher costs, many had already begun purchasing electronics in a rush, particularly iPhones and laptops. The exemption will likely prevent those fears from becoming a reality, stabilizing prices for these popular consumer products. However, the broader impact of the tariffs and trade war on global markets continues to reverberate, contributing to market volatility and uncertainty.

The exemption represents a notable softening in the US’s approach to the trade conflict with China. Although it doesn’t mark a full resolution of the trade war, it is a sign of potential thawing relations between the two economic powers. Backdated to April 5, this exemption covers an estimated $390 billion in US imports, including over $101 billion from China. This move offers a glimpse into the shifting dynamics of international trade and its effect on global markets, particularly the tech industry, which remains at the center of the ongoing geopolitical tensions.