Super Micro Computer (SMCI) shares jumped about 11% in after-hours trading on Tuesday (to about $36) after the server maker said fiscal first-quarter revenue should land at $18.5 billion to $19.5 billion, far above its own $14.5 billion to $15.5 billion forecast.
The catch is margin. Revenue is on track to rise about 71% from the June quarter, but gross profit only about 20%, because gross margin falls back to roughly 12% from 17.47%.
What Super Micro Said on October 20
- Revenue of $18.5 billion to $19.5 billion, against the $15.23 billion LSEG average, according to Reuters.
- Gross margin of 12.0% to 12.5%, against 10.4% to 10.8% guided, on customer and product mix.
- The figures are preliminary and unaudited, with full results due November 3.
- No word on the $65 billion to $72 billion full-year revenue guide.
Why SMCI’s Margin Matters More Than Its Revenue
Big quarters at Super Micro have come with thin margins. The record $12.68 billion December 2025 quarter carried a 6.30% gross margin, and June’s 17.47% was the outlier.
At the midpoints, gross profit rises to about $2.33 billion from $1.94 billion in June. Useful, but far smaller than the revenue jump suggests.
The full-year guide is the bigger puzzle. With $19 billion in the first quarter, the remaining three quarters would need to average just $15.3 billion to $17.7 billion to meet it. Either Super Micro raises the year on November 3, or its own forecast has the rest of the year running below this quarter’s pace.
Where Analysts Have SMCI Stock
The Street’s mean target is $42.27, about 30% above Tuesday’s $32.47 close and about 17% above the after-hours price. It has barely moved since September 30 ($42.38), while the stock fell 21% from $41.07.
So analysts didn’t chase October’s slide, and this bounce wins back less than half of it. That gap only closes if the cash shows up. Fiscal 2026 burned $6.8 billion of operating cash as inventory swelled to $12.9 billion, so November 3 needs to show cash keeping pace with revenue, and a full-year number to match.
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