SMCI's Margins Contracting: Is it Still Built for Profitable Scale?

Key Takeaways SMCI's Q3 FY25 gross margin dropped to 9.7%, down 590 bps from 15.6% a year ago. Margin pressure stems from costly new AI products and higher inventory reserves for older units. SMCI is scaling global production to cut costs and boost long-term gross margin efficiency.Super Micro Computer’s (SMCI) top line is rapidly expanding on the back of its innovative product portfolio. Its direct liquid cooling (DLC) and server offerings have been experiencing robust traction from hyperscalers, high-pe ...