MW Super Micro backs away from a lofty goal, and its stock is sinking

By Emily Bary

The server maker is targeting $33 billion in revenue for the fiscal year that just began - below a forecast given back in February

Analysts had their doubts about Super Micro Computer Inc.'s ability to hit a $40 billion revenue target for the fiscal year that just began, back when the company gave that eye-popping forecast in February. And now the company seems to be backing off that outlook.

The server maker said Tuesday afternoon that it expects at least $33 billion in revenue for fiscal 2026, which ends next June. For context, the company did $22 billion in revenue in the fiscal year that just finished.

Super Micro $(SMCI)$ gave that earlier $40 billion figure back in February, though management said in May that it wasn't providing guidance until "the visibility becomes more clear."

The company also set an outlook of $6 billion to $7 billion for the current quarter, which at the midpoint is below the $6.63 billion that analysts tracked by FactSet had been expecting.

Super Micro shares were down about 12% in after-hours trading Tuesday.

The company's outlook dovetailed with the results from the June quarter, which also came up short. Super Micro posted $5.76 billion in revenue, up from $5.35 billion a year earlier, though analysts had been looking for $5.98 billion.

Super Micro said it expects to reach six to eight large-scale data-center customers this fiscal year, compared with four last fiscal year.

Gross margins for the latest quarter came in at 9.5%, down slightly from the 9.6% level posted in the March quarter and the 10.2% level recorded in the year-earlier June quarter.

While there continues to be high demand for artificial-intelligence servers, the market is more competitive than it was early last year, when Super Micro shares peaked at roughly double the price they trade at today.

A Wedbush analyst wrote prior to Tuesday's report that he expected gross margins to remain a "potential point of weakness," partly stemming from Nvidia Corp.'s (NVDA) product transition. His industry conversations suggested that Nvidia content is making up a bigger portion of the bill of materials, squeezing vendor margins, especially when the design of Nvidia's GB200 rack-scale offerings provide "little room for differentiation."

Super Micro also missed expectations on adjusted earnings per share in the June quarter, bringing in 41 cents while analysts were looking for 45 cents.

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

August 05, 2025 16:24 ET (20:24 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.