Key Stats for SMCI Stock
- Price change for SMCI stock: 14%
- $SMCI Share Price as of Feb. 4: $34
- 52-Week High: $66
- $SMCI Stock Price Target: $47
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What Happened?
Super Micro Computer (SMCI) stock surged almost 14% after the server maker crushed second-quarter expectations and raised its full-year revenue outlook to at least $40 billion, up from a prior target of $36 billion.
The jump reflects growing investor confidence that demand for AI infrastructure will remain strong through the rest of the fiscal year.
- Super Micro reported second-quarter revenue of $12.68 billion, up 123% year-over-year and well above analyst estimates of $10.34.
- The company also delivered adjusted earnings per share of $0.69, topping the $0.49 guidance range.
- AI GPU platforms accounted for more than 90% of revenue in the quarter as customers ramped large-scale data center buildouts.
For the third quarter, SMCI stock got another boost from management’s revenue guidance of at least $12.3 billion.
CEO Charles Liang said the company’s new Data Center Building Block Solutions, or DCBBS, is gaining traction with customers who want faster deployment times and lower power consumption.
The modular infrastructure product line accounted for 4% of profits in the first half of the fiscal year and is expected to reach a double-digit contribution by the end of calendar 2026.
However, gross margins declined to 6.4% in the second quarter from 9.5% in the prior quarter.
Liang attributed the decline to shifts in customer mix toward large model builders with pricing leverage, higher transportation costs, component shortages, and tariff impacts.
The company expects gross margins to improve by 30 basis points in the third quarter and continue expanding as DCBBS scales and component costs stabilize.
SMCI stock also benefited from improvements in working capital. The cash conversion cycle fell from 123 days in the first quarter to 54 days in the second quarter, driven by faster inventory turns and higher payables turnover.
The company raised more than $3.8 billion in new credit facilities during the quarter to fund its aggressive expansion plans.
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What the Market Is Telling Us About SMCI Stock
The rally in SMCI stock suggests investors are willing to overlook near-term margin pressure in exchange for explosive revenue growth and an improved outlook.
The company’s ability to raise its full-year forecast to $40 billion despite component shortages and pricing headwinds signals strong underlying demand for AI servers.
Investors should watch whether gross margins stabilize and begin expanding as promised, whether DCBBS adoption accelerates among enterprise and cloud customers, and whether Super Micro can diversify its customer base beyond the single large data center customer that represented 63% of second-quarter revenue.
The company’s ability to execute on its infrastructure buildout strategy while managing costs will determine whether SMCI stock can sustain its momentum through the rest of the year.
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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!
