Super Micro Computer (NASDAQ: SMCI) reported earnings for its fiscal Q3'25 on Tuesday, largely meeting its own heavily watered-down guidance. However, the company's outlook for the June-ending quarter, coupled with a lack of affirmation on the $40 billion FY 2026 revenue figure previously guided to, is predictably taking a toll on the sentiment around the high-momentum stock.
As a refresher, Super Micro Computer is one of the leading GPU-as-a-Service players and a prominent retailer of liquid-cooled AI racks. Just a few weeks back, SMCI was generally regarded as one of the best hardware plays, handily outpacing the gains notched by the AI maestro NVIDIA.
However, as mentioned earlier, Super Micro Computer's latest earnings have been somewhat deficient, to the detriment of its high-flying stock.
To wit, SMCI reported $4.6 billion in revenue for its fiscal Q3 2025, matching its recently issued guidance but failing to outpace the consensus expectation of Wall Street analysts, pegged at $5.05 billion.
It was Super Micro Computer's guidance, however, that was generally found anemic. After all, the company now expects to report its fiscal Q4'25 revenue in the range of $5.6 billion to $6.4 billion vs. the $6.81 billion consensus estimate.
Moreover, the company now expects to earn FY 2025 revenue of between $21.8 billion and $22.6 billion, constituting a substantial discount to the $23.5 billion consensus estimate.
Finally, SMCI has also chosen not to reiterate its previous FY 2026 revenue guidance of $40 billion, citing the uncertainty around tariffs and AI diffusion rules.
This brings us to the crux of the matter. Citi has now lowered its price target for Super Micro Computer shares to $37, citing revenue pushouts from "customers awaiting next-generation GPUs [that] will take more than a quarter to resolve, further exacerbating investor concerns on competitive dynamics, GPU allocation, visibility and AI lumpiness."
On the bright side, Citi notes:
"Management sounds optimistic on revenue trajectory ahead given robust order momentum QTD, GPU technology transition (which typically sees higher level of customization and better margins), next generation DLC (expected to double in volume) solutions and manufacturing ramp in Malaysia."
According to Rosenblatt, Super Micro Computer faces revenue realization delays, to the tune of ~$1 billion and precipitated by the ongoing customer evaluations of the next-generation NVIDIA Blackwell GPU platforms. Rosenblatt analyst Kevin Cassidy thinks this revenue from the March-ending quarter will now materialize in the June and September quarters.
Interestingly, Needham analyst N. Quinn Bolton has adopted an unequivocally bullish stance on Super Micro Computer's prospects:
"We find the valuation to be extremely attractive for a company targeting AI/HPC end markets and at the forefront of liquid-cooled data centers."
At the time of writing, Super Micro Computer shares are down 6 percent in pre-market trading. So far this year, however, the stock is still up around 10 percent.
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