Super Micro Drops 5% Ahead of Earnings as AI Server Selloff Extends; Dell Falls 4%, HPE Slides 3%

AI server stocks are extending the slide that began in the prior session, and Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction) is feeling the pressure just before its next earnings report. Super Micro stock is at $31.15, down 5% during the afternoon session. Results are due on November 3.

The group’s slide started on October 30, when Super Micro fell 4% as a broad AI selloff followed a weak outlook from Intel (NASDAQ:INTC). The S&P 500 fell 2% and the NASDAQ Composite dropped 3% that day, while Intel plunged 29% after releasing a weak profit forecast. Over the past month, Super Micro stock is down 23%. Even so, the shares remain up 8% year to date (YTD).

Super Micro’s Preliminary Numbers Set a High Bar

A preview of Super Micro’s Q1 FY2027 results is already out. Super Micro put its preliminary September-quarter revenue at $18.5 billion to $19.5 billion, well above Super Micro’s prior guidance of $14.5 billion to $15.5 billion. That puts the focus on whether AI infrastructure demand remains durable, whether gross margins hold and whether memory shortages push costs higher.

At its last report on August 11, Super Micro posted a non-GAAP gross margin of 17.6% for Q4 FY2026. Management credited that margin to better customer and product mix, plus contracts deferred into later quarters, lower tariff costs and lower inventory reserves. CEO Charles Liang called the quarter’s revenue shortfall “purely a timing story,” and the company guided Q1 gross margin to 10.4% to 10.8%.

Dell and HPE Slide Alongside Super Micro

The AI server rival tracking Super Micro most closely is Dell Technologies (NYSE:DELL). Dell stock is at $407.98, down 4%. Over the past month, Dell stock has fallen 24%, a steeper drop than Super Micro’s over the same stretch. That decline still leaves Dell up 228% YTD.

Dell reported an AI backlog of $95 billion at the end of its last quarter. On Dell’s September 1 call, Jeff Clarke described the company’s supply limits as “DRAM, DRAM, DRAM, followed by NAND, NAND, NAND.” Memory pressure of that kind could also show up in Super Micro’s margins. Super Micro’s results are the next read on AI server demand, since Dell’s next report doesn’t come until later in November.

The third name in the group, Hewlett Packard Enterprise (NYSE:HPE), is holding up a bit better. HPE stock is at $53.27, down 3%. Across the past month, HPE stock has fallen 17%, a smaller pullback than Super Micro and Dell have taken.

How Super Micro’s Business Differs From Dell and HPE

Super Micro is a focused AI infrastructure vendor, selling servers and its Data Center Building Block Solutions (DCBBS), which bundle computing, storage, liquid cooling, networking and management software. Dell spreads its exposure across AI servers, traditional servers, storage and a large PC business, giving it more revenue streams if one slows. Networking is a bigger piece of HPE’s business after its Juniper Networks acquisition, alongside servers, storage and its GreenLake hybrid-cloud platform. That concentration leaves Super Micro more exposed than either peer to swings in AI server timing and pricing. For readers thinking about the broader AI expansion beyond the obvious chipmakers, we rounded up seven suppliers across power, cooling and networking in a free report here.

What Super Micro’s November 3 Report Has to Prove

What matters now for Super Micro is whether its final results and outlook confirm that AI demand is turning into profitable growth. Bulls expect a rebound on solid results, pointing to the preliminary revenue range and the record backlog the company carried into fiscal 2027. The bears cite fiscal 2026 operating cash outflow of $6.8 billion from a working capital build, a heavy inventory position, the board’s independent review tied to export-control matters and weak sentiment around AI hardware.

Super Micro’s record against estimates has also been uneven, with its Q2 FY2026 results beating forecasts after two straight quarters of misses. Analyst sentiment is lukewarm: 11 of 19 analysts rate the stock Hold and 3 at Sell or Strong Sell. The average analyst price target is $43.27.

Management’s comments on memory costs and cash conversion could matter as much as the headline revenue figure. A conservative investment approach could make sense until the debate over Super Micro’s margins settles.

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