Why Did SNAP and SMCI Shares Crash in Premarket Trading Today?

Two major technology stocks experienced dramatic selloffs in premarket trading Wednesday, August 6, 2025, following disappointing second-quarter earnings results. Snap Inc. (SNAP) plummeted 17.40% to $7.76 in premarket trading after closing at $9.39 on Tuesday, while Super Micro Computer (SMCI) crashed 17.18% to $47.42 after closing at $57.26.

Both companies missed key financial metrics that investors closely monitor, triggering widespread selling pressure.

Snap’s Revenue Per User Misses Triggers Premarket Crash

Snap Inc. shares tanked more than 17% in premarket trading after the social media company reported second-quarter results that missed Wall Street’s expectations on a crucial revenue metric.

The company’s global average revenue per user (ARPU) came in at $2.87, falling short of the $2.90 analysts had expected according to StreetAccount. This metric is particularly important for social media platforms like Snapchat because it directly measures how effectively the company monetizes its user base through advertising revenue.

While Snap beat expectations on user growth with 469 million global daily active users versus the 467 million expected, the ARPU miss overshadowed this positive development. The company’s total revenue of $1.34 billion also slightly missed the $1.35 billion consensus estimate, though it represented 9% year-over-year growth. CEO Evan Spiegel attributed the revenue headwinds to a botched advertising platform update that caused ad campaigns to clear auctions at “substantially reduced prices.”

The advertising platform glitch has since been resolved, with Spiegel noting that “advertising revenue growth has improved as advertisers adjust their bid strategies.” However, the company also faced headwinds from the timing of Ramadan and effects from President Trump’s trade policies. Despite these challenges, Snap provided optimistic third-quarter guidance, projecting revenue between $1.475 billion and $1.505 billion, ahead of Wall Street estimates of $1.475 billion.

The ARPU metric is especially critical for social media companies because it demonstrates pricing power and the ability to extract value from each user. Unlike traditional businesses that sell physical products, platforms like Snapchat rely entirely on advertising revenue, making ARPU a key indicator of business health. The miss suggests Snap is struggling to maintain premium advertising rates in a competitive digital advertising landscape dominated by larger players like Meta and Google.

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Super Micro Computer Disappoints with Weak Guidance and Tariff Impact

Super Micro Computer shares plunged over 17% in premarket trading after the AI server manufacturer reported fiscal fourth-quarter results that fell short of expectations and provided disappointing forward guidance. The company posted adjusted earnings per share of 41 cents versus the 44 cents expected by analysts, while revenue of $5.76 billion missed the $5.89 billion consensus estimate. Net income declined to $195.2 million, or 31 cents per share, down from $297.2 million, or 46 cents per share, in the same quarter last year.

The revenue growth deceleration was particularly concerning for investors, with Super Micro’s sales increasing just 7.5% during the quarter compared to the explosive growth rates seen in 2023 and early 2024. CEO Charles Liang attributed part of the earnings decline to the impact of President Trump’s tariffs on goods imported into the U.S., stating that the company has “taken measures to reduce the impact” and expects to see results from these efforts.

Looking ahead, Super Micro’s fiscal first-quarter guidance disappointed Wall Street expectations across the board. The company projected adjusted earnings per share of 40 to 52 cents on revenue of $6 billion to $7 billion, well below analyst estimates of 59 cents per share and $6.6 billion in revenue. This weak outlook suggests the company is experiencing a significant slowdown in demand for AI servers as the initial wave of artificial intelligence infrastructure buildout matures.

The disappointing results mark a sharp reversal for Super Micro, which had been one of the biggest beneficiaries of the AI boom starting in 2023.

The company’s servers packed with Nvidia chips were in high demand as companies rushed to build AI computing capacity. However, growth has since moderated as the market moves beyond the initial infrastructure phase. Despite the recent decline, Super Micro shares remain up approximately 88% year-to-date, significantly outperforming the broader S&P 500’s 7% gain.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.