Super Micro Slumps As Analysts Weigh Nvidia AI Tailwinds Against Margin Pressures

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. Needham analyst N. Quinn Bolton maintained Super Micro with a Buy and raised the price forecast from $39 to $60. Wedbush analyst Matt Bryson reiterated Super Micro with a Neutral and raised the price forecast from $30 to $48. Also Read: Can Super Micro’s AI Demand Outpace Profit Margin Fears?NeedhamBolton stated that Super Micro reported fiscal fourth-quarter 2025 results that fell short of expectations. Revenue was $5.76 billion, up 25.2% sequentially but below Bolton’s $6.00 billion and the Street’s $6.01 billion estimates. Adjusted EPS landed at $0.41, missing Bolton’s $0.45 and the Street’s $0.44 due to weaker-than-expected revenue and gross margin performance.Bolton attributed the miss to Supermicro’s limited access to capital, which delayed volume production. The delay stemmed from the company’s late 10-K filing, which is now resolved.In addition, changes in a key customer’s product specification further pushed back revenue recognition. Management does not expect these headwinds to persist into fiscal first-quarter 2026.Adjusted gross margin came in at 9.6%, below Bolton’s and the Street’s 10% estimates. The company guided first-quarter revenue to $6.5 billion, below Bolton’s $7.25 billion estimate but slightly ahead of the Street’s $6.59 billion. Gross margin is expected to remain at 9.6%, again under Street expectations. Bolton sees EPS for the quarter at $0.46, below its prior $0.64 forecast.Despite short-term pressures from large deals and tariffs, Bolton remains optimistic about margin recovery. Super Micro has begun deploying its Data Center Building Block Solutions (DCBBS), which should drive margin expansion over time and could account for 20–30% of future revenue.The company is also increasing investment in enterprise, IoT, and telecom, with product launches targeting servers, storage, and edge systems. Bolton raised its price forecast to $60, based on 16x fiscal 2027 EPS of $3.70.WedbushBryson noted that Super Micro’s fiscal fourth-quarter 2025 results and fiscal first-quarter 2026 guidance came in slightly below expectations, with revenue falling short while EPS and gross margins aligned with prior forecasts.Management’s fiscal 2026 revenue outlook of at least $33 billion exceeded the prior consensus of $29.94 billion by more than $2 billion.Bryson sees this divergence as reinforcing both bullish and bearish narratives. Bears may point to underwhelming fourth-quarter revenue, cautious first-quarter guidance, and the lack of gross margin rebound, especially given ongoing competitive pressures and tariff concerns.Bulls, on the other hand, will likely focus on the strong fiscal 2026 sales guide, suggesting rising demand from large AI customers. Management highlighted an increase in 10% customers—from two last year to four in fiscal 2025—as evidence of growing momentum.While Bryson remains concerned about long-term gross margin sustainability due to high Nvidia NVDA content and limited product differentiation, he acknowledged the rapidly expanding opportunity for OEMs, particularly in enterprise AI, neocloud, and sovereign spending.Super Micro’s strong positioning may allow it to capture a meaningful share of this expanding total addressable market.Bryson raised his price forecast to $48, applying a 13x P/E multiple to fiscal 2027 EPS estimates of $3.68.Price Action: SMCI shares were trading lower by 21.5% to $44.97 at last check on Wednesday. Disney Focuses On Content Deals, Raises Annual Profit Outlook Image via Shutterstock