SMCI Weighs on Nvidia in Premarket Trading

Nvidia’s stock dipped -2% in early trading after Super Micro Computer ( NASDAQ: SMCI ) issued a cautious outlook, fuelling concerns about the broader AI server market. SMCI shares are down -16% in premarket trading. Super Micro revealed that some customers are postponing purchases, holding out for newer systems built with Nvidia’s upcoming Blackwell chips instead of the current Hopper generation.

SMCI's Q2 Guidance

• Q2 revenue between $5.5 billion and $6.1 billion versus estimates of $6.84 billion
• Q2 adjusted EPS of $0.56 to $0.65 compared to expectations of $0.81

We believe that lower guidance from SMCI is not a significant concern for Nvidia, as long as the company can ramp up sales of Blackwell hardware to meet demand.

Nvidia Photo by BoliviaInteligente on Unsplash

Looking ahead, what Nvidia needs most is confirmation from Meta and Microsoft’s earnings today that they are maintaining their previously guided capital expenditure levels. This would be a major win for Nvidia. In Alphabet's earnings, we saw that they didn’t reduce AI spending, and we hope to see the same trend among other hyperscalers. Tonight’s earnings reports from Meta and Microsoft will provide further confirmation and offer support to Nvidia’s stock, which has been struggling to break through the $110 resistance level.