Supermicro (SMCI) bets big on Nvidia, but its stock is imploding
Super Micro Computer (SMCI) is widening its role in the artificial intelligence hardware market, deepening its collaboration with Nvidia as it seeks to become a more integral part of the AI supply chain.
By aligning its systems with Nvidia’s newest chip platform, Blackwell, the company aims to move beyond selling servers and toward delivering complete, ready-to-deploy AI data-center systems.
Earlier this month, Supermicro announced plans to build new AI cluster solutions based on Nvidia’s enterprise reference designs and its Blackwell infrastructure.
In practical terms, the company will assemble pre-engineered systems that follow Nvidia’s blueprints, allowing organizations to install large-scale AI hardware without having to design it themselves.
In effect, Supermicro is positioning itself as a provider of full AI factory systems built around Nvidia technology, a shift that could make it a preferred partner for companies deploying advanced AI models.
“The AI factory is the foundation for transforming every company into an AI company,” said Supermicro president and CEO Charles Liang.
Supermicro has traditionally been known for producing high-performance servers and storage equipment. Its expanded partnership with Nvidia moves the company further up the technology stack.
Instead of supplying individual hardware components, Supermicro will deliver complete AI clusters, combining compute, networking, cooling, and management software, offering customers turnkey infrastructure for scaling AI operations.
Despite its deepening alignment with Nvidia, Supermicro’s stock hasn’t reflected that momentum. In fact, it has been one of the weakest-performing AI names over the past month.
SMCI stock falls sharply
Amid a broader market pullback from record highs, Supermicro has been hit especially hard. The stock is down more than 33% over the past month and has remained deeply negative over the past year.
Unlike many AI-focused companies, Supermicro shares have not returned to record levels in 2025. The stock last closed above $110 in early 2024 and has since fallen more than 70%.
At current prices, the company’s market value has slipped below $20 billion.
The company’s weak performance this year stems in part from missed earnings expectations and multiple revenue downgrades. Supermicro also closed its fiscal first quarter with a gross margin of just 9.3%, the lowest in its history.
The results underscored how rising costs and an unfavorable product mix are squeezing profitability at a time when investors expected stronger gains from the AI boom.
Supermicro’s disappointing quarter followed a similarly weak report over the summer, when higher tariff costs weighed on results. The company also faced a setback from “specification changes from a major new customer that delayed revenue recognition,” CEO Charles Liang told shareholders.