Key Stats for Super Micro Computer Stock
- Pre-Market Price Change for SMCI stock: -9%
- $SMCI Share Price as of Nov. 4: $47
- 52-Week High: $66
- $SMCI Stock Price Target: $53
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What Happened?
Super Micro Computer (SMCI) stock tumbled as much as 9% in pre-market after the AI server maker reported fiscal first-quarter results that badly missed Wall Street expectations.
Revenue came in at $5.02 billion versus the $5.80 billion analysts expected, while adjusted earnings per share stood at $0.35 vs. estimates of $0.39.
The report marked the second disappointment in less than a month. In late October, Super Micro pre-announced that first-quarter revenue would hit just $5 billion—down from its prior guidance range of $6 billion to $7 billion.
The company blamed “design win upgrades” that caused some revenue to shift from the September quarter into the December quarter.
Revenue declined 15% year-over-year from $5.94 billion, while net income got cut in half to $168.3 million from $424.3 million a year earlier.
The steep profit drop reflects mounting pressure on margins as the company ramps new products and expands manufacturing capacity globally.
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What the Market Is Telling Us About SMCI Stock
The decline in SMCI stock reflects growing investor concern about the company’s ability to maintain its momentum in the competitive AI infrastructure market.
While Super Micro has been a key beneficiary of the AI boom—selling servers packed with Nvidia GPUs to hyperscalers and cloud providers—some analysts believe Dell has been taking market share recently.
There’s a silver lining in the company’s guidance. Super Micro expects second-quarter revenue of $10 billion to $11 billion, well above the $7.83 billion Wall Street was expecting.
The hardware entity also raised its full-year revenue outlook to “at least $36 billion” from a prior target of “at least $33 billion.”
CEO Charles Liang highlighted that SMCI has over $13 billion in backorders for its Nvidia Blackwell Ultra GB300 product line, including what he referred to as “the largest deal in our 32-year history.”
However, SMCI stock is getting hammered because margins are deteriorating. CFO David Weigand warned that gross margins would drop 300 basis points in the December quarter compared to the already-thin 9.5% reported in Q1.
The company is investing heavily to ramp production of complex new GPU rack systems, expand manufacturing facilities in Taiwan, Malaysia, and the Netherlands, and support large-scale customer deployments.
Management emphasized that these margin pressures are temporary, tied to ramping up “one of the largest clusters in the world” for a major customer and establishing new manufacturing capacity.
They pointed to their Data Center Building Block Solutions (DCBBS) as a future margin driver, claiming that data center infrastructure businesses typically generate gross margins of over 20%.
But investors clearly want to see proof that margins can improve, not just promises. With SMCI stock now down over 73% from its 52-week high, the company faces a credibility challenge.
Despite strong revenue growth prospects and an impressive backlog, the market is demanding better execution and clearer visibility into when profitability will recover.
Until Super Micro can demonstrate sustained margin improvement, SMCI stock is likely to remain under pressure.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
