Super Micro Computer (NASDAQ:SMCI) Shares Up 19% After Better-Than-Expected Earnings

Key Points

• Super Micro Computer shares surged 19% after the company reported quarterly EPS of $1.70, well above the $0.92 analyst consensus. Revenue rose 93.2% year over year to $11.12 billion, though it fell short of the $11.60 billion estimate.
• Management issued an upbeat outlook, forecasting fiscal 2027 revenue of $65 billion to $72 billion and first-quarter EPS of $1.01 to $1.10, supported by strong AI-server demand and record backlog.
• Analysts remain divided: some raised price targets as high as $51, while others maintained neutral or sell ratings amid concerns about margin volatility, lower expected first-quarter gross margins and patent litigation.

Super Micro Computer, Inc. (NASDAQ:SMCI - Get Free Report)'s stock price shot up 19% on Wednesday after the company announced better than expected quarterly earnings. The stock traded as high as $38.15 and last traded at $37.61. Approximately 164,272,381 shares were traded during mid-day trading, an increase of 267% from the average session volume of 44,723,430 shares. The stock had previously closed at $31.60.

The company reported $1.70 EPS for the quarter, beating analysts' consensus estimates of $0.92 by $0.78. The firm had revenue of $11.12 billion during the quarter, compared to analyst estimates of $11.60 billion. Super Micro Computer had a net margin of 3.70% and a return on equity of 17.49%. The business's revenue for the quarter was up 93.2% on a year-over-year basis. During the same period in the previous year, the business earned $0.31 EPS. Super Micro Computer has set its Q1 2027 guidance at 1.010-1.100 EPS.

More Super Micro Computer News

Here are the key news stories impacting Super Micro Computer this week:

• Positive Sentiment: Strong earnings and AI-driven growth: Super Micro reported adjusted fourth-quarter EPS of $1.70, well above the approximately $0.92 consensus, while revenue rose 93.2% year over year to $11.12 billion. Profit surged as gross margin improved to roughly 17.6%. Super Micro Computer Stock Rallies as Profits, Outlook Top Estimates
• Positive Sentiment: Above-consensus outlook: Management projected fiscal 2027 revenue of $65 billion to $72 billion, substantially above the roughly $53.1 billion analyst consensus. First-quarter fiscal 2027 revenue guidance of $14.5 billion to $15.5 billion and EPS guidance of $1.01 to $1.10 also exceeded expectations, supported by record backlog and demand for AI-optimized servers. Super Micro forecasts upbeat annual revenue
• Positive Sentiment: Analyst support and sector read-through: Rosenblatt raised its target to $51 and maintained a buy rating, while Needham reiterated its buy rating with a $46 target. The forecast also lifted related AI infrastructure and semiconductor stocks, including Nvidia, Dell, Micron and SK Hynix, as investors interpreted the report as evidence that data-center spending remains strong.
• Neutral Sentiment: Mixed Wall Street reaction: Citigroup and Wedbush raised their price targets to $39 and $40, respectively, but both retained neutral ratings, indicating that analysts see improved prospects while remaining cautious about execution and profitability.
• Neutral Sentiment: Elevated trading interest: Traders purchased approximately 375,905 call options, 38% above typical volume. This signals increased speculative interest but does not by itself establish a fundamental change in value.
• Negative Sentiment: Revenue miss and margin risk: Quarterly revenue fell short of the $11.60 billion consensus, and management expects significantly lower first-quarter gross margins as product mix shifts. Analysts also noted continuing margin volatility and a lack of specific free-cash-flow commitments.
• Negative Sentiment: Patent litigation overhang: An ITC patent action naming SMCI, Micron and HPE could create legal and licensing uncertainty, although potential settlements remain possible.

Analysts Set New Price Targets

Several research firms have weighed in on SMCI. Rosenblatt Securities raised their price target on Super Micro Computer from $45.00 to $51.00 and gave the company a "buy" rating in a report on Wednesday. CJS Securities upgraded shares of Super Micro Computer from a "market underperform" rating to a "market perform" rating in a research report on Wednesday, May 6th. The Goldman Sachs Group reaffirmed a "sell" rating and issued a $34.00 target price (up from $30.00) on shares of Super Micro Computer in a research note on Wednesday. Raymond James Financial reiterated an "outperform" rating and set a $48.00 target price on shares of Super Micro Computer in a research report on Wednesday. Finally, Northland Securities set a $36.00 price target on shares of Super Micro Computer in a report on Wednesday, July 22nd. Four equities research analysts have rated the stock with a Buy rating, twelve have assigned a Hold rating and two have issued a Sell rating to the stock. According to MarketBeat.com, the stock presently has an average rating of "Hold" and an average price target of $41.80.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of the business. Geode Capital Management LLC boosted its stake in shares of Super Micro Computer by 0.3% in the 4th quarter. Geode Capital Management LLC now owns 13,808,499 shares of the company's stock valued at $402,627,000 after purchasing an additional 41,314 shares in the last quarter. Invesco Ltd. lifted its stake in Super Micro Computer by 21.2% in the fourth quarter. Invesco Ltd. now owns 9,953,780 shares of the company's stock worth $291,347,000 after purchasing an additional 1,738,749 shares during the last quarter. Disciplined Growth Investors Inc. MN boosted its position in Super Micro Computer by 16.5% during the second quarter. Disciplined Growth Investors Inc. MN now owns 9,730,773 shares of the company's stock valued at $476,905,000 after buying an additional 1,381,046 shares during the period. Norges Bank purchased a new stake in Super Micro Computer during the fourth quarter valued at about $136,569,000. Finally, Dimensional Fund Advisors LP grew its holdings in shares of Super Micro Computer by 2.8% in the first quarter. Dimensional Fund Advisors LP now owns 4,082,780 shares of the company's stock worth $92,872,000 after purchasing an additional 111,388 shares during the last quarter. 84.06% of the stock is currently owned by institutional investors.

Super Micro Computer Stock Performance

The firm has a market cap of $22.62 billion, a P/E ratio of 19.90, a price-to-earnings-growth ratio of 0.37 and a beta of 1.95. The company has a current ratio of 2.66, a quick ratio of 1.29 and a debt-to-equity ratio of 0.88. The business's fifty day simple moving average is $30.58 and its 200-day simple moving average is $30.44.

Super Micro Computer Company Profile

Super Micro Computer, Inc (Supermicro) is a technology company that designs, develops and manufactures high-performance server, storage and networking solutions for enterprise, cloud, data center, high performance computing (HPC) and edge computing customers. The company's product portfolio includes rackmount and blade servers, storage subsystems, motherboards, chassis, power supplies and networking components, with an emphasis on high-density, energy-efficient configurations and platforms optimized for GPU-accelerated workloads and artificial intelligence applications.

Headquartered in San Jose, California, Supermicro combines in-house engineering with a global manufacturing and distribution footprint to deliver configurable, application-specific systems.

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