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Super Micro Computer stock crashed 23% on Friday after the company announced the date of its Q3 earnings.
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Wall Street seemed disappointed that Super Micro Computer did not preannounce earnings like it did last year.
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The sharp decline dragged down AI darling Nvidia, which plunged about 10%.
Super Micro Computer stock crashed as much as 23% on Friday as investors worry about the strength of its upcoming earnings report.
Super Micro Computer announced it would release its third-quarter earnings results on April 30, but it didn’t preannounce earnings as it did for its second-quarter earnings results in January.
Companies often preannounce earnings when the results are significantly above Wall Street consensus estimates.
That lack of an earnings preannouncement from Super Micro Computer sparked concerns on Wall Street that the company’s upcoming earnings report won’t be as robust as it was last quarter and could ultimately miss analyst expectations.
Super Micro Computer did not offer Wall Street “a positive preannouncement, which is being considered a negative,” Wells Fargo Securities wrote on Friday, according to Bloomberg.
The company has experienced insane growth over the past year, as demand for its AI-equipped servers has soared. The stock, which surged more than 1,000% in a year, was catapulted into the S&P 500 from the small-cap Russell 2000 index earlier this year.
Nvidia chips are installed in Super Micro Computer’s server solutions, so investors appear to be extrapolating the potential weakness in Super Micro Computer’s upcoming earnings report to Nvidia.
Shares of Nvidia plunged as much as 10%, resulting in a market cap decline of $183 billion.
Read the original article on Business Insider