Core Viewpoint - Super Micro Computer (SMCI) has faced significant challenges with revenue forecasting and gross margins, leading to a volatile stock performance, with shares down approximately 25% over the past year but up nearly 50% year to date [1] Revenue Performance - For fiscal Q4, Supermicro's revenue increased by 7% year over year to $5.76 billion, missing the analyst consensus of $5.89 billion and falling within the low end of its guidance range of $5.6 billion to $6.4 billion [5] - The company has consistently lowered its revenue guidance throughout the fiscal year, starting with a reduction in November for fiscal Q1 revenue from $6 billion to $7 billion to a range of $5.9 billion to $6 billion [2][5] Gross Margin Issues - Supermicro's gross margins have been under pressure, dropping from 17% a year earlier to 11.3% in June 2024, and further declining to 9.5% in fiscal Q4 compared to 10.2% a year ago [6][7] - The decline in gross margins is attributed to price reductions to secure new design wins and increased competition in the GPU platform transition [6][7] Profitability Challenges - The company's adjusted EPS fell by 24% to $0.41, missing the analyst consensus of $0.44, indicating that lower gross margins are adversely affecting profitability [10] - Fiscal Q1 revenue guidance is projected between $6 billion and $7 billion, but adjusted EPS guidance of $0.40 to $0.52 is below the analyst estimate of $0.59 [10] Future Outlook - For fiscal 2026, Supermicro projects revenue growth to at least $33 billion, representing a 50% increase, driven by expanding its enterprise customer base and new product innovations [11] - The company aims to improve gross margins by focusing on higher-margin markets and complete data center solutions, with a long-term goal of reaching 15% to 16% [9] Valuation Considerations - The stock trades at a forward price-to-earnings ratio of just over 16 times based on fiscal-year 2026 estimates, which appears reasonable given the revenue growth guidance [13] - However, the business model is characterized as low-margin and may struggle with GPU product transition cycles, making it less favorable compared to other AI infrastructure companies [12][13]

Group 1: Palantir Technologies - Palantir Technologies has seen its shares increase by 2,700% since January 2023, but analysts believe the stock is overvalued with a potential downside of 75% from its current price of $182 [1][6] - The company specializes in data analytics and AI platforms, serving both commercial and government sectors, with a reported revenue growth of 48% to $1 billion in the second quarter [3][5] - Palantir is recognized as a market leader in decision intelligence software and AI platforms, with the data analytics software market expected to grow at 28% annually through 2030 [4] Group 2: Super Micro Computer - Super Micro Computer's shares have increased by 470% since January 2023, but analysts project a 49% downside from its current price of $47 due to margin pressures from increased competition [1][8] - The company designs and manufactures AI servers and has a competitive advantage in time-to-market for new chips, but has recently faced challenges as competition has intensified [8][9] - Super Micro's revenue for the June quarter increased by 7% to $5.8 billion, but gross margins narrowed and GAAP earnings fell by 33% [10]

Group 1 - Super Micro Computer (SMCI) stock experienced a significant decline, reaching a low of $44.92 following disappointing fiscal fourth-quarter results, but has shown a slight recovery to $46.49 [1] - Despite the recent downturn, SMCI stock is up 53% year-to-date, indicating strong performance over the longer term [1] - AI prediction tools suggest a modest recovery for SMCI stock, with a consensus forecast predicting a price of $49.41 by August 31, representing a potential gain of 6.03% from current levels [3][4] Group 2 - Individual model predictions for SMCI stock varied, with the most bullish estimate at $52.85 (+13.42%) and the most bearish at $42.35 (-9.12%), leading to an average forecast of $49.41 [6] - Technical indicators show a shift toward bearish momentum, with the MACD crossing below its signal line and the RSI dropping to around 40, indicating potential oversold conditions but not yet at classical oversold levels [10][11] - The 50-day moving average is trending upward around $47, which may provide technical support for recovery efforts, although the recent price decline has created uncertainty about the stock's near-term direction [11]

Core Viewpoint - Super Micro Computer's stock experienced a nearly 20% decline following disappointing financial results, yet most analysts believe the stock is slightly undervalued with a median target price of $50, indicating an 8% upside from the current price of $46 [1][13]. Financial Performance - Super Micro's revenue for the fourth quarter of fiscal 2025 rose by 7% to $5.8 billion, but it missed consensus sales estimates and cut its fiscal 2026 outlook from $40 billion to $33 billion, projecting a 50% increase instead of over 80% [10][11]. - Gross margin fell by 70 basis points to 9.5%, and GAAP earnings dropped by 33% to $0.31 per diluted share [10]. - The company provided disappointing first-quarter guidance, expecting revenue to increase by 10% to $6.5 billion and GAAP earnings to decline by 46% to $0.36 per diluted share [11]. Market Position and Competition - Super Micro is recognized as an early leader in the AI server market, manufacturing data center storage systems and servers optimized for AI and high-performance computing [6]. - The company has developed liquid cooling solutions to enhance data center efficiency, but it faces increasing competition, leading to narrowing margins [8]. - Analysts express mixed views on Super Micro's valuation, with some projecting a target price of $70 per share, indicating a 52% upside, while others, like Goldman Sachs, value it at $24 per share, suggesting a 48% downside due to competitive pressures [2][3]. Industry Outlook - The AI server market is expected to grow by 55% this year, with projections indicating a 38% annual expansion to reach $2.3 trillion by 2033 [12]. - Despite the overall market growth, Super Micro's lackluster revenue growth and weakening margins suggest it may be losing market share, particularly as competitors like Dell Technologies gain momentum [12].

Group 1 - The analyst has 5 years of experience managing a technology fund and has a background in Mechanical Engineering from Brazil and France [1] - The focus of the analysis is on investment opportunities in the semiconductor sector, robotics, and energy, emphasizing companies in oligopolistic markets with high barriers to entry [1] - The investment strategy prioritizes growth at a reasonable price with a mid- to long-term investment horizon [1] Group 2 - The analyst has previously worked in the oil and gas sector before transitioning to global equities and semiconductor research [1] - The analyst has completed CFA Level II in 2024 and is licensed by the Brazilian Securities Commission as a portfolio manager and investment consultant [1] - The analyst aims to provide small investors with valuable investment ideas through published articles [1]

JR Research is an opportunistic investor. He was recognized by TipRanks as a Top Analyst. He was also recognized by Seeking Alpha as a "Top Analyst To Follow" for Technology, Software, and Internet, as well as for Growth and GARP. He identifies attractive risk/reward opportunities supported by robust price action to potentially generate alpha well above the S&P 500. He has also demonstrated outperformance with his picks. He focuses on identifying growth investing opportunities that present the most attracti ...

Group 1 - Super Micro Computer (SMCI) shares fell 18% on Wednesday, reaching $46.88, marking a total decline of 24% for the week, although the stock is still up 56% year-to-date [1][4] - The decline was triggered by disappointing fiscal fourth-quarter results, with adjusted earnings of $0.41 per share, missing the Wall Street estimate of $0.45, and down from $0.63 a year ago. Revenue increased by 8% year-over-year to $5.8 billion but fell short of the expected $6 billion [4] - The adjusted gross margin decreased to 9.6%, below the anticipated 10%, raising concerns among analysts [4] Group 2 - CEO Charles Liang mentioned production scaling challenges due to limited working capital, which the company is addressing through a $2.3 billion convertible bond offering initiated in June, following a $700 million raise in February [5] - Super Micro provided weaker-than-expected guidance for its fiscal first-quarter revenue and earnings but projected a more optimistic long-term revenue of $33 billion for fiscal 2026, significantly higher than analysts' $20 billion estimate [6] Group 3 - Analysts have mixed views on SMCI stock; Bank of America maintained an 'Underperform' rating with a $37 price target, citing ongoing margin pressure and potential delays in customer purchases due to upcoming Nvidia GPUs [7] - Conversely, Needham maintained a 'Buy' rating and raised its price target from $39 to $60, highlighting potential for margin recovery and growth opportunities in new markets, particularly in Direct Liquid Cooling and Building Block Solutions [8]

Core Insights - Super Micro Computer (SMCI) reported fourth-quarter fiscal 2025 non-GAAP earnings of 41 cents per share, missing the Zacks Consensus Estimate by 6.8%, and reflecting a year-over-year decline of 34.9% [1][10] - The company's fourth-quarter fiscal 2025 revenues were $5.76 billion, which also missed the Zacks Consensus Estimate by 3.82%, although it showed an 8.5% year-over-year improvement and a 25.2% sequential increase [1][10] Revenue Breakdown - Revenues from Server and storage systems, which constitute 97.6% of total revenues, increased by 10% year over year to $5.62 billion, while revenues from subsystems and accessories decreased by 48% to $139 million [3] - By geography, the United States accounted for 38% of total sales, down 33% year over year, while Asia represented 42% of revenues, reflecting a significant year-over-year increase of 91% [3] - Revenues from Europe accounted for 15% of total revenues, showing a year-over-year increase of 66%, and revenues from the Rest of the World accounted for 5%, increasing by 53% year over year [4] Customer Vertical Performance - Enterprise/Channel revenues totaled $2.1 billion, accounting for 36% of total sales, with a year-over-year increase of 7% and strong sequential growth of 6% [5] - OEM Appliance and Large Data Center verticals contributed $3.7 billion, representing 63% of total fourth-quarter revenues, while the Emerging 5G, Telco, Edge, and IoT verticals accounted for only 1% of total revenues [5] Operating Metrics - SMCI's non-GAAP gross margin was 9.6%, reflecting a decline of 70 basis points year over year and 10 basis points sequentially, primarily due to an unfavorable product and customer mix [6] - Non-GAAP operating expenses increased by 29% year over year to $239 million, although they declined by 11% sequentially, driven by heavy investments in next-generation AI systems and expansion of production capacity [7][8] Financial Position - As of June 30, 2025, total cash and cash equivalents were $5.17 billion, up from $2.54 billion in the previous quarter [9] - Operating and free cash flow for the reported quarter were $864 million and $841 million, respectively [9] Future Outlook - SMCI forecasts fiscal 2026 revenues of at least $33 billion, with first-quarter sales expected to be between $6 billion and $7 billion [10][11]

Super Micro Computer SMCI shares are trading lower on Wednesday after the company reported worse-than- expected fourth-quarter financial results. The semiconductor maker issued first-quarter EPS and adjusted EPS guidance below estimates, and cut its fiscal 2026 sales guidance on Tuesday. Wall Street analysts raised their price forecasts on the stock. Also Read: Can Super Micro's AI Demand Outpace Profit Margin Fears? Needham Bolton stated that Super Micro reported fiscal fourth-quarter 2025 results that fel ...

Super Micro Computer, Inc. (NASDAQ: SMCI ) aka "Supermicro" reported its fiscal Q4 '25 earnings yesterday evening, and the stock quickly saw a 20% slide . Going into earnings, shares were in the $58 range, and now inI’m a retired Wall Street PM specializing in TMT; since kickstarting my career, I’ve spent over two decades in the market navigating the technology landscape, focusing on risk mitigation through the dot com bubble, credit default of ‘08, and, more recently, with the AI boom. In one word, what I’ ...