Jim Cramer's Critique of Super Micro Computer's Earnings

Jim Cramer, the well-known host of CNBC’s "Mad Money," has voiced his strong criticism of Super Micro Computer Inc (SMCI) following the company’s latest business update and preliminary earnings report for the first quarter.

What Happened: Cramer shared his thoughts on Super Micro's performance in a post on X. He remarked, "Super Micro is so good at exonerating itself, better than it is selling NVIDIA Corp (NVDA) GPUs," highlighting his concern about the company’s sales performance in relation to its ability to justify its operations.

This comment came after Super Micro released its preliminary earnings figures on a recent Tuesday. The company announced an expected revenue range of $5.9 billion to $6 billion for the quarter, which is lower than its previous forecast of $6 billion to $7 billion.

Additionally, Super Micro expects adjusted earnings to fall between 75 cents and 76 cents per share, in contrast to an earlier prediction of 67 cents to 83 cents per share. Furthermore, the gross margin for the first quarter is projected at around 13.3%.

Looking Ahead

Why It Matters: For the second quarter, Super Micro has projected revenue between $5.5 billion and $6.1 billion, with adjusted earnings anticipated between 56 cents and 65 cents per share. This guidance has raised concerns among investors regarding the company’s financial stability and credibility, especially in light of previous governance issues.

Super Micro’s financial standing has been questioned since its independent auditor, Ernst & Young, resigned due to concerns related to governance and transparency. This resignation prompted a decline in Super Micro's stock price as investors reacted to the unfolding challenges within the company.

Current Stock Performance

Price Action: On the day of the announcement, Super Micro Computer Inc. closed at $27.70, reflecting a daily gain of 6.42%. However, in after-hours trading, the stock experienced a sharp decline, dropping by 15.88%. Since the beginning of the year, the stock has seen a decrease of 2.98%, as reported by recent data.

The overall sentiment concerning Super Micro remains cautious, with investors closely monitoring the company's performance and any potential developments regarding its governance issues.

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Cramer, Earnings, SuperMicro