TLDR
- SMCI reported Q4 FY2026 adjusted EPS of $1.70, beating the $1.59 consensus estimate by 7%
- Gross margin hit 17.6%, roughly 892 basis points above expectations
- Revenue came in at $11.12 billion, slightly below the $11.26 billion consensus due to customer project delays
- FY2027 revenue guidance of $65B to $72B crushed the $54.4B consensus estimate
- Bernstein raised its price target to $42; BofA raised to $33 but kept an Underperform rating
Super Micro Computer (SMCI) surged 14% on Tuesday after the company posted fourth-quarter fiscal 2026 results that beat profit expectations and gave a revenue outlook well above what Wall Street had penciled in.
The stock was trading around $36 during the session.
Super Micro Computer, Inc., SMCI
SMCI reported adjusted earnings per share of $1.70 for Q4 FY2026, coming in 7% above the consensus estimate of $1.59. Revenue reached $11.12 billion, up 9% from the prior quarter, though slightly below the $11.26 billion consensus due to delays in large customer AI projects.
Those delays were tied to customer readiness issues around power, cooling, and networking infrastructure, pushing some revenue into Q1 FY2027.
The headline number that really got investors’ attention was gross margin. SMCI posted a gross margin of 17.6% for the quarter, roughly 892 basis points above what analysts had expected.
That’s a sharp turnaround from the company’s trailing twelve-month gross margin of around 10.8%.
Management said about 75% of the sequential margin improvement came from a favorable customer and product mix, including more CPU servers and 50% of revenue from Enterprise and Channel. The remaining 25% came from lower tariff costs and reduced inventory reserves.
AI solutions made up roughly 60% of Q4 revenue, below typical levels. But the company’s backlog suggests more than 80% of future revenue will come from AI-related products.
Guidance Blows Past Estimates
For FY2027, SMCI guided revenue of $65 billion to $72 billion. That’s well above the Wall Street consensus of $54.4 billion at the time.
For Q1 FY2027, the company guided revenue of $14.5 billion to $15.5 billion versus the consensus of $12 billion. EPS guidance for the quarter came in at $1.01 to $1.10, against analyst estimates of $0.74.
The company also said it received $60 billion in new orders during the June quarter.
Analysts React
Bernstein raised its price target on SMCI to $42 from $37, keeping a Market Perform rating. The firm lifted its FY2027 and FY2028 EPS estimates to $3.99 and $3.53, up from $2.80 and $3.25 respectively.
BofA Securities raised its price target to $33 from $28 but kept an Underperform rating. The firm called Q4 margins unsustainable and flagged continued pressure from competition, component cost increases, and rising engineering costs.
Rosenblatt raised its target to $51 with a Buy rating. Needham reiterated a Buy with a $46 target. Mizuho set its target at $35 with a Neutral rating.
BofA also noted that SMCI guided Q1 gross margin to just 10.6% at the midpoint, down 700 basis points from Q4.
Five analysts have revised their earnings estimates upward for the upcoming period, according to InvestingPro data.
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