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Super Micro Computer Inc. (NASDAQ:SMCI) shares took a major hit on Wednesday after the company reported disappointing fiscal fourth-quarter results. The stock fell over 18%, trading around $46.80 per share. This sharp decline came as both revenue and earnings fell short of Wall Street expectations.
The company said the shortfall was mainly due to capital constraints and delays in customer orders, which hurt their financial performance. Adding to investor concern, Supermicro’s gross margin came in at 9.5%, which was below the company’s prior guidance. Even though they expect higher revenue next quarter, the company is only forecasting flat margins, meaning profitability won’t improve despite making more sales.
Supermicro offered some strong forward guidance, projecting first-quarter revenue around $6.5 billion and full-year revenue for fiscal 2026 of at least $33 billion. This forecast beats analysts’ consensus of $30 billion, showing that the company still expects strong growth moving forward.
Despite the weak quarterly numbers, analyst opinions were mixed.
Rosenblatt Securities maintained a Buy rating, pointing to Supermicro’s fast time-to-market with new products as a key strength. The firm especially highlighted Supermicro’s Data Center Building Block Solutions (DCBBS) and its lead in liquid cooling technology with its DLC-2 system. Rosenblatt believes these technologies could help improve Supermicro’s margins over time, even though current results are under pressure.
On the other hand, Barclays stayed cautious and kept its Equal Weight rating, meaning they don’t see the stock as a strong buy right now. While Barclays acknowledged the impressive full-year revenue guidance, they also expressed concerns about short-term risks, including flat margins and potential production difficulties. Still, Barclays raised its price target to $45 from $29, based on long-term potential from DCBBS improving market share and profitability.
Meanwhile, Bank of America remained bearish, keeping its Underperform rating on the stock. The bank warned that margin pressures may continue, especially as the market for AI servers becomes more competitive. BofA noted that companies like Dell are gaining market share, and that many customers are delaying purchases while they wait for new GPUs, like NVIDIA’s GB300.
The bank also flagged ongoing working capital needs, which could put pressure on the company’s free cash flow. Even so, Bank of America raised its price target slightly, from $35 to $37, though it still expects challenges ahead.
In summary, while Supermicro faces near-term hurdles, especially around margins and delayed customer spending, some analysts remain optimistic about the company’s long-term growth potential through innovation in liquid cooling and AI data centre technology. But the road ahead may be bumpy as competition heats up and operational execution becomes more critical than ever.