Analysts Grow More Careful on Super Micro Computer (SMCI) Despite AI Demand

Core Insights - Super Micro Computer, Inc. (SMCI) reported adjusted earnings per share of $0.35 for fiscal first quarter 2026, missing Wall Street expectations of $0.40, with revenue of $5.02 billion compared to analyst expectations of $6 billion [1][2] - Goldman Sachs highlighted that SMCI's earnings fell short due to customer deliveries being pushed to the next quarter as customers upgrade their designs [2] - The firm has a Sell rating on SMCI due to long-term profitability concerns in a competitive AI server market, while Bank of America has an Underperform rating with a price target of $34 [3] Financial Performance - SMCI's fiscal first quarter 2026 EPS of $0.35 missed the guidance range of $0.40-$0.52, attributed to revenue miss driven by delivery delays [2] - The guidance for fiscal second quarter 2026 indicates a doubling of revenue quarter-over-quarter, but a sequential decline of approximately 300 basis points in gross margins is expected [2] Market Position and Competitive Landscape - SMCI is recognized for its large manufacturing capacity and ability to ship thousands of liquid-cooled racks monthly, which are seen as competitive advantages [3] - Analysts caution that the AI server market is becoming increasingly competitive, with larger deals often resulting in tighter margins due to competitive bidding processes [4] Investment Outlook - While SMCI shows potential as an investment, analysts suggest that other AI stocks may offer greater upside potential with less downside risk [5]