Trump Tariffs Challenge SMCI’s AI Business, But Global Supply Chain Eases Blow After Weak Q4 – Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), Super Micro Computer (NASDAQ:SMCI)
Super Micro Computer Inc.SMCI reported a challenging fourth quarter for fiscal year 2025, with management attributing a decline in earnings per share primarily to the impact of tariffs imposed by President Donald Trump.
What Happened: Despite the weak financial results, the company is strategically mitigating future risk by leveraging its diversified global supply chain, a critical move as it positions itself at the heart of the booming AI infrastructure market.
During the earnings call, CEO Charles Liang directly addressed the issue, stating that non-GAAP earnings per share were “down year over year… primarily due to the tariff impact.”
The significance of this comment becomes clear when viewed alongside the company’s core business. The CFO, David Wiegand, noted that demand for “next-generation air-cooled and liquid-cooled GPU AI platforms… represented over 70% of Q4 revenues.”
By linking the tariff impact to the company’s overall financial performance and noting that the majority of its business is AI-related, the earnings call implied the direct threat tariffs pose to the AI supply chain.
In response to these challenges, Supermicro is highlighting its robust manufacturing presence in key global regions.
Liang emphasized that the company’s “large and versatile manufacturing campus across the U.S., Taiwan, Malaysia and the Netherlands” enables it to “respond to dynamic regional demands, support cost sensitive customers… mitigate tariff exposure, and maintain a reliance global supply chain.”
This strategy is designed to make the company more resilient to geopolitical trade fluctuations.
Looking forward, the company remains optimistic about its long-term strategy and growth. Liang projects “at least $33 billion total revenue” for fiscal year 2026, supported by its expanding customer base and the introduction of its new higher-margin “data center building block solution” (DCBBs).
These solutions, along with a focus on the enterprise, IoT, and telco markets, are expected to gradually improve gross margins and lessen the dependence on high-volume, lower-margin business.
Why It Matters: SMCI reported a fourth-quarter net sales of $5.76 billion, up from $4.6 billion in the previous quarter and $5.4 billion in last year’s fourth quarter. However, it missed the consensus estimate of $5.88 billion.
The earnings per share of $0.41 missed the Street consensus estimate of $0.44.
Price Acton: On Tuesday, the SMCI stock dropped 16.29% after-hours following its earnings results. The stock has surged by 90.55% year-to-date but is down 7.18% over the past year.
Benzinga’s Edge Stock Rankings indicate that SMCI maintains a strong price trend across the short, medium, and long term. However, the stock scores moderately on value rankings. Additional performance details are available here.
Price Action: The SPDR S&P 500 ETF TrustSPY and Invesco QQQ Trust ETFQQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, declined on Tuesday. The SPY was down 0.51% at $627.97, while the QQQ declined 0.68% to $560.27, according to Benzinga Pro data.
On Wednesday, the futures of Dow Jones, S&P 500, and Nasdaq 100 indices were trading higher.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
AstraZeneca has paused plans to invest £200m at a Cambridge research site in a fresh blow to the UK pharmaceutical industry.
The project, which was set to create 1,000 jobs, was announced in March 2024 by the previous government alongside another project in Liverpool, which was shelved in January.
An AstraZeneca spokesperson said: “We constantly reassess the investment needs of our company and can confirm our expansion in Cambridge is paused.”
Over the last 10 years, UK spending on medicines has fallen from 15% of the NHS budget to 9%, while the rest of the developed world spends between 14% and 20%.
Meanwhile, pharmaceutical companies have been looking to invest in the US following Trump’s threats of sky-high tariffs on drug imports.
In July, AstraZeneca said it would invest $50bn (£36.9bn) in the US on “medicines manufacturing and R&D [research and development]”.
Earlier this week Merck, which had already begun construction on a site in London’s King’s Cross which was due to be completed by 2027, said it no longer planned to occupy it.
The multi-national business, known as MSD in Europe, said it would move its life sciences research to the US and cut UK jobs, blaming successive governments for undervaluing innovative medicines.
Getty Images
AstraZeneca boss Pascal Soriot announced the firm’s $50bn investment in the US in July
The paused Cambridge project would have been an expansion of its existing Discovery Centre, which already hosts 2,300 researchers and scientists.
The stoppage comes after it scrapped plans to invest £450m in expanding a vaccine manufacturing plant in Merseyside in January, blaming a reduction in government support.
It said at the time that after “protracted” talks, a number of factors influenced the move, including “the timing and reduction of the final offer compared to the previous government’s proposal”.
Successive UK governments have pointed to life sciences as one of its most successful industries.
Former chancellor Jeremy sector said the sector was “crucial for the country’s health, wealth and resilience” while Chancellor Rachel Reeves said AstraZeneca was one of the UK’s “great companies” days before it scrapped its Liverpool expansion.
Major lenders are building artificial intelligence-powered “agents” – software that can do the same work as humans – in their business banking divisions, as the battle for AI supremacy in financial services intensifies despite workforce concerns about the risk to jobs.
Commonwealth Bank of Australia is building what it describes as “virtual relationship managers” in its business bank. The customer-facing technology is in a pilot stage as the bank discusses the timing of a market rollout with regulators.
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If hard skills are increasingly being automated, employers are shifting focus to what AI can’t replicate: creativity, empathy, critical thinking, and other essential soft skills.
For years, technical abilities were king, but the tide may be turning.
Indeed’s Hiring Lab took a look at job postings and analyzed which soft skills were listed. The top were communication, leadership, and organizational prowess. Forty-three percent of all job listings had at least one soft skill advertised.
Soft skills show up in job postings across industries, but maybe not where you’d expect:
In a world where machines can write code and analyze spreadsheets, the need for human insight, emotional intelligence, and creativity has never been more critical.
Employers don’t just want workers who can do the job; they want people who can collaborate, innovate, and lead.
