SMCI Stock Forecast & Price Target

Super Micro Computer Inc. has shown substantial growth potential, as evidenced by its increased inventory of $5.7 billion, up from $4.7 billion, and an optimistic revision of its FY26 revenue outlook to at least $36 billion, driven primarily by strong demand for AI data center solutions. The company's positive outlook is bolstered by expanding engagements in Data Center Building Block Solutions (DCBBS) and the expectation of sequential revenue growth throughout FY2026, despite short-term challenges. Furthermore, anticipated margin improvements are expected to arise from enhanced production scale, product mix, and global manufacturing efficiencies as the company navigates its early ramp phase.

Super Micro Computer Inc. reported a significant revenue drop of 12.8% quarter-over-quarter and 15.5% year-over-year, with first-quarter revenue of $5.02 billion falling short of both the company’s guidance and the street estimates. The company anticipates further challenges, as gross margins are projected to decline by approximately 300 basis points in the second quarter, primarily due to the initial ramp-up costs associated with a new mega-scale product. Additionally, the guidance for non-GAAP earnings per share of $0.50 is below both consensus and internal estimates, highlighting potential operational and competitive vulnerabilities that may adversely impact future earnings.