SMCI Stock Forecast & Price Target

Super Micro Computer Inc. is experiencing substantial revenue growth, with an increase from $3.6 billion in FY21 to $15 billion in FY24, demonstrating a robust demand for its high-performance server technology services, particularly in the AI sector, which now accounts for nearly 70% of total sales. The company is projected to achieve a continued revenue increase of approximately 30% year-over-year, reaching around $30.7 billion by FY26, while expanding gross margins to 11% and targeting earnings per share of $2.84. Additionally, operational scaling efforts in the U.S., Taiwan, and Malaysia are expected to enhance efficiency and reinforce Supermicro's competitive position in the high-performance computing market, supporting a favorable outlook for future growth.

Super Micro Computer Inc. has experienced a decline in its non-GAAP gross margin, which dropped to 11.9% from 13.3% in the previous quarter, attributed to an unfavorable product and customer mix along with increased costs related to product delays and R&D investments. The company has revised its FY2025 revenue guidance downward from $26B-$30B to $23.5B-$25B, reflecting a potential 13% decrease at the midpoint, with a lackluster outlook for Q4 revenue remaining significantly below analyst expectations. Furthermore, recent quarterly sales and guidance indicate weaker-than-expected performance, as actual sales of $5.68B in the December quarter fell short of estimates, signaling reduced visibility and potential challenges in maintaining revenue growth amidst competitive pressures.