Super Micro Computer Q4 Preview: Ready to Move Forward with Rating Upgrade

Super Micro Computer is set to release its Q4 earnings on August 5th. The company has been growing its server business, which should contribute to a strong Q4 performance. Additionally, its revenue is expected to reach $5.5 billion, up 15% YoY. Overall, Super Micro Computer is poised for continued growth and success.

Super Micro Computer, Inc. (SMCI) is set to release its Q4 earnings on August 5th. The company has been growing its server business, which should contribute to a strong Q4 performance. Additionally, its revenue is expected to reach $5.5 billion, up 15% year-over-year (YoY). Overall, Super Micro Computer is poised for continued growth and success.

Super Micro Computer is a global leader in high-performance, energy-efficient server and storage solutions. The company designs, develops, and sells a wide range of IT infrastructure products and services for enterprise data centers, cloud computing, AI, 5G, and edge computing markets. Despite recent challenges, SMCI remains a significant player in the industry.

In the third quarter of fiscal 2025, SMCI's server and storage segment experienced a 19% YoY growth, primarily driven by demand in high performance computing (HPC) and AI workloads [2]. The company's direct liquid cooling technology and data center building block solutions (DCBBS) have contributed to this growth.

However, SMCI has faced some challenges in recent quarters. The company's adjusted EPS of $0.31 and revenue of $4.6 billion in Q3 2025 fell short of Wall Street expectations. Additionally, the company's decision not to provide full-year 2026 forecasts due to tariff-related uncertainty added to the market's negative reaction [1].

Investor concern was further fueled by shrinking gross margins, which dropped to 9.6% YoY, and a steep decline in net income to $109 million. The company's reliance on NVIDIA for GPU integration, with Blackwell accounting for over 70% of its AI revenue, creates a single point of vulnerability. The commoditization of liquid cooling technology has also reduced the premium SMCI could charge for its DLC-enabled solutions [3].

Despite these challenges, SMCI's forward price-to-sales ratio of 1.02X is lower than the industry average of 1.49X, indicating that the stock may be undervalued [2]. The company's recent innovations and strategic partnerships could help offset its long-term margin risks and competitive vulnerabilities.

Analysts' consensus view on Super Micro Computer stock remains cautious, with an overall "Hold" rating. However, the stock is trading above the average analyst price target of $42.27 [1].

Super Micro Computer is expected to report an EPS of $0.35 for Q4 2025, a decline of 36.4% from $0.55 in the year-ago quarter. For fiscal 2025, analysts expect the server technology company to report EPS of $1.72, marking a decrease of 14.4% from $2.01 in fiscal 2024. However, EPS is anticipated to grow 26.7% YoY to $2.18 in fiscal 2026 [1].

In conclusion, Super Micro Computer is poised for continued growth and success, despite facing some challenges. The company's recent innovations and strategic partnerships could help offset its long-term margin risks and competitive vulnerabilities. Investors should closely monitor the company's earnings release and future guidance to assess its long-term prospects.

References:
[1] https://www.barchart.com/story/news/33465511/what-you-need-to-know-ahead-of-super-micro-computer-s-earnings-release
[2] https://www.barchart.com/story/news/33563075/super-micro-computer-s-hpc-solutions-propel-server-growth-what-s-next
[3] https://www.ainvest.com/news/super-micro-computer-s-marginal-edge-navigating-commoditization-and-competitive-pressures-in-ai-server-market-25071010a86125b0da3bc6bb/