TLDR
- SMCI rose 6% to $31.13, with the stock trading as high as $31.34 during the session
- Supermicro booked over $60 billion in new AI server orders in a single quarter, pushing its backlog to a record level
- Gross margin guidance came in at 15% to 17%, roughly double earlier estimates of 8.2% to 8.4%
- The company is raising $7 billion through equity-related financing to fund order fulfillment
- Earnings are due August 11, with analysts holding an average price target of $39.21 and an overall Hold rating
Super Micro Computer stock climbed 6% to $31.13 on Friday, with intraday highs reaching $31.34. Despite the move, the stock remains well below its 52-week high of $58.78.
Super Micro Computer, Inc., SMCI
The catalyst was a mix of renewed optimism around AI infrastructure demand and a closer look at the company’s latest preliminary quarterly update, which revealed some eye-catching numbers.
Supermicro said it booked more than $60 billion in new AI server orders in its fiscal fourth quarter ended June 30. That pushed its backlog to a record level heading into fiscal 2027.
Revenue for the quarter is expected to come in near the low end of the $11 billion to $12.5 billion guidance range. That part is less exciting. But the margin story is a different picture.
Gross margins are now expected to land between 15% and 17%. That compares to prior guidance of just 8.2% to 8.4%, roughly doubling what investors were told to expect earlier in the year.
Why the Stock Still Trades Around $30
Despite the massive order book, the market is not exactly celebrating. Supermicro itself flagged that not all of those orders are firm commitments, and some could be subject to cancellations or delays.
The company is also issuing $7 billion in equity-related financing to fund component purchases needed to fulfill those orders. That raises dilution concerns for existing investors.
On top of that, an independent board review of certain transactions related to alleged export control issues is still ongoing. The independent auditor has also not yet reviewed the preliminary figures.
Those overhangs explain why the stock trades at a price-to-earnings ratio of just 16.47, with a PEG ratio of 0.36, near multiyear valuation lows.
What to Watch on August 11
All eyes now turn to the August 11 earnings report. Investors will want clarity on how much of the $60 billion backlog converts into firm revenue, and whether margins can hold at those improved levels.
The last earnings report in May showed EPS of $0.84, beating the $0.63 consensus estimate. Revenue of $10.24 billion missed the $12.39 billion estimate, but still represented 122.7% growth year over year.
Analyst sentiment is split. Four analysts rate the stock Buy, 12 rate it Hold, and two rate it Sell. The average price target sits at $39.21.
Rosenblatt Securities has a $45 price target with a Buy rating. Goldman Sachs maintained a Sell rating. Wedbush cut its target from $42 to $34 and rates the stock Neutral.
Institutional ownership stands at 84.06%, with several funds adding to positions in Q2, including Baird Financial Group, which increased its stake by 54.9%.
The stock’s 50-day moving average is $31.56 and the 200-day moving average is $30.46, putting the current price right in line with both levels.
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