Goldman defends Super Micro Computer (SMCI.US): Short-term guidance is weak, but AI prospects remain promising.
1min read Goldman published a research report, raising the target price of Super Micro Computer (SMCI.US) to USD36 from USD32 and maintaining a "neutral" rating.
Super Micro Computer previously announced preliminary financial information for its second quarter of fiscal 2025 ending December 2024. The company expects adjusted EPS of USD0.58-0.60 in the second quarter, lower than Goldman's/consensus expectations of USD0.62/USD0.61. The company's Q2 revenue and gross margin guidance also fell short of expectations, mainly due to its ongoing transition from the Hopper to the Blackwell platform.
Super Micro Computer's guidance for the third quarter of fiscal 2025 fell short of expectations, and it also lowered its fiscal 2025 guidance, but its revenue guidance for fiscal 2026 exceeded expectations. Super Micro Computer expects revenue to reach USD40bn in fiscal 2026, far above the market's expectation of USD2.9bn, and expects annual growth of more than 60% in the coming years. Considering the company's historical growth rate, the target of USD40bn is too conservative.
Super Micro Computer reiterated that it expects to file its 10-K annual report for the period ending June 30 and its 10-Q quarterly report for the period ending September with the U.S. Securities and Exchange Commission before February 25.
Goldman raised its EPS expectations for Super Micro Computer's fiscal 2025/26/27 by an average of 5% to reflect the company's positive outlook for continued growth of more than 60% in fiscal 2026/27.
Goldman said that Super Micro Computer is a winner in the AI field and is in a very favorable position to meet the needs of AI cloud service providers in the coming years. However, the competition in the AI infrastructure services market may become more intense over time, especially with the participation of IT hardware suppliers focused on enterprises such as Dell and Cisco.
Super Micro Computer closed nearly 8% lower on Monday at USD51.61.
