Latest news with #SMCI
Forbes
12 hours ago
- Business
- Forbes
Buy or Sell Super Micro Stock Ahead of Earnings?
Super Micro Computer (NASDAQ:SMCI) is expected to announce its Q4 2025 earnings close to August 5, 2025 (June year). The stock has performed exceptionally well in recent months leading up to the fourth quarter earnings, increasing by nearly 60% in the past three months. According to consensus estimates, revenues are anticipated to increase by approximately 11% year-over-year to $5.9 billion, while earnings are projected to be around $0.44 per share, slightly down from the previous year. The revenue growth is likely to be fueled by sustained demand from the AI, cloud computing, and data center sectors. New offerings such as high-memory X14 servers and advanced liquid-cooled GPU systems utilizing AMD Instinct MI350s, which provide improved performance and energy efficiency for dense AI workloads, are expected to be significant contributors to the business during this quarter. We will be keeping a close eye on margins, which have been under pressure, as the company prioritizes the development of its liquid cooling technology for servers. As of Q3 FY'25, Super Micro's gross margin, indicating the percentage of revenue remaining after deducting the direct costs of production, was just 9.6%, down from 11.8% in Q2 FY'25 and 15.5% in Q3 FY'24. The company's current market capitalization stands at $36 billion. Revenue for the past twelve months was $22 billion, and it was operationally profitable with $1.3 billion in operating profits and a net income of $1.2 billion. Though much will hinge on how results compare with consensus and expectations, understanding historical trends could potentially improve the odds in your favor if you are an event-driven trader. There are two approaches to achieve this: understand the historical probabilities and position yourself ahead of the earnings release, or analyze the correlation between immediate and medium-term returns following earnings and adjust your position accordingly once the earnings are made public. That said, if you are seeking upside with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative — having outperformed the S&P 500 and delivered returns exceeding 91% since its launch. See earnings reaction history of all stocks Historical Probabilities of Positive Post-Earnings Returns for Super Micro Computer Here are some insights on one-day (1D) post-earnings returns: Additional data on observed 5-Day (5D) and 21-Day (21D) returns post earnings is compiled along with the statistics in the table below. Correlation Between 1D, 5D, and 21D Historical Returns A comparatively less risky tactic (albeit not effective if the correlation is low) involves understanding the correlation between short-term and medium-term returns following earnings, identifying a pair with the highest correlation, and executing the appropriate trade. For instance, if 1D and 5D display the strongest correlation, a trader can position themselves 'long' for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data derived from 5-year and 3-year (more recent) histories. Note that the correlation 1D_5D denotes the correlation between 1D post-earnings returns and subsequent 5D returns. Is There Any Connection With Peer Earnings? At times, the performance of peers can affect the post-earnings stock response. In fact, price movements may commence even before the earnings announcements. Here is some historical data regarding the post-earnings performance of Super Micro Computer stock in relation to the stock performance of peers who reported earnings just prior to Super Micro Computer. For a fair comparison, peer stock returns also reflect post-earnings one-day (1D) returns. Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combining all 3: the S&P 500, S&P mid-cap, and Russell 2000), to yield strong returns for investors. Additionally, if you prefer upside with a more stable experience than an individual stock like Super Micro Computer, consider the High Quality portfolio, which has surpassed the S&P, and achieved over 91% returns since its inception.
Business Insider
2 days ago
- Business
- Business Insider
Super Micro Computer (SMCI) Stock Jumps 10% on Exclusive AI Server Deal and Trade Shift
Super Micro Computer (SMCI) shares rose 10.2% on Monday, to close at $60.05. The jump followed news of a new strategic partnership and reports of softened trade enforcement between the United States and China. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. AI Partnership and Trade Pause Boost Server Outlook Digi Power X announced that Super Micro Computer will be the exclusive server supplier for its new ARMS 200 modular data center platform. The platform is designed to support up to 256 Nvidia (NVDA) B200 or B300 GPUs per pod, with each pod offering one megawatt of compute capacity. Digi Power X plans to deploy the system at its Alabama site, scaling to 40 megawatts in total. That would support around 10,240 Nvidia GPUs. The initial rollout is planned for the fourth quarter of 2025, with a full launch expected in early 2026. The deal highlights Super Micro Computer's position in the AI server infrastructure market. The company has built its product line around modular designs through its Data Center Building Block Solutions strategy. The ARMS 200 integration aligns with that approach and expands the company's reach into high-density GPU workloads. The stock also benefited from reports that the U.S. Department of Commerce may delay enforcement of export rules aimed at China. Several news outlets cited current and former officials who said the pause is part of a broader effort to keep trade channels open. Easing trade risk supports hardware and semiconductor firms that serve global customers. Super Micro Computer, which has exposure to Asia, may benefit if current restrictions stay limited through the next quarter. SMCI is set to report fiscal fourth-quarter earnings on August 5. Analysts forecast earnings of $0.45 per share, down 30.2% from last year. Revenue is expected to rise 12.8% year-over-year to $5.99 billion. The stock is up nearly 100% year-to-date and has gained 112% over the past six months. Nvidia and Vertiv Also Stand to Benefit Nvidia and Vertiv Holdings (VRT) also stand to gain from rising demand for modular AI data centers. Nvidia supplies the GPUs, and Vertiv Holdings provides thermal and power systems used in high-density builds. All three names are linked by the growing need for AI-ready infrastructure. Is SMCI Stock a Good Buy? an average SMCI stock price target of $42.85. This implies a 28.64% downside.
Yahoo
2 days ago
- Business
- Yahoo
Super Micro Stock Surges Before Q4 Earnings. Is A Correction Coming?
Super Micro Computer (SMCI) will announce its fourth quarter fiscal 2025 financial results on Tuesday, Aug. 5. SMCI stock has been on a tear ahead of Q4 earnings, rallying 63.7% over the past three months. This reflects a sharp rebound that signals the market's renewed confidence in the company's AI-driven future. Fueling the recent surge is robust demand for Supermicro's AI solutions, which are critical components in high-performance computing infrastructure. The stock received an additional boost from a $20 billion partnership with Saudi Arabia-based DataVolt. This strategic deal expands Supermicro's global footprint and fortifies its pipeline for future growth. More News from Barchart Tesla Just Signed a Chip Supply Deal with Samsung. What Does That Mean for TSLA Stock? Here's What Happened the Last Time Novo Nordisk Stock Was This Oversold Dear Microsoft Stock Fans, Mark Your Calendars for Aug. 1 Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. The recent momentum marks a significant turnaround for a company that, just last year, found itself in the crosshairs of short-seller Hindenburg Research. The report leveled serious allegations, including accounting irregularities, causing SMCI shares to tumble. The situation escalated when Super Micro delayed its annual SEC filings, raising concerns over possible delisting from the Nasdaq Exchange. However, the company managed to weather the storm. By submitting its overdue financials, Super Micro narrowly avoided a delisting and has since regained the market's trust, as reflected in the recent rally in its price. Still, the road hasn't been entirely smooth. In its fiscal third quarter, Super Micro reported $4.6 billion in revenue, falling short of expectations. Management pointed to a temporary pause in purchasing as customers considered whether to invest in Nvidia's (NVDA) existing Hopper GPUs or wait for the next-generation Blackwell platform. As a result, certain orders were deferred, although the company expects many of those deals to materialize by the end of September. Given the recent rally, it's clear the market is already pricing in acceleration in Super Micro's top-line growth in Q4. That sets the bar high for the upcoming earnings report. Any signs of continued hesitation in AI infrastructure spending or a cautious tone from management could trigger notable volatility in SMCI shares. AI-Driven Demand to Boost SMCI's Growth Super Micro's top line could continue to benefit from high AI-driven demand. The company's management expects its top line to be in the range of $5.6 billion to $6.4 billion, reflecting an increase of 5% to 21% over the $5.3 billion reported in the same quarter last year. The increase in sales of its server and storage systems, primarily driven by the rise in demand from customers for GPU servers, high-performance computing, and rack-scale solutions, will drive its revenue. This top-line growth will likely be driven by the rising demand for SMCI's GPU servers and high-performance computing systems. As AI applications become more sophisticated and widely adopted across industries, both enterprise clients and cloud service providers are leaning heavily on SMCI's server and storage solutions. AI GPU platforms accounted for more than 70% of the company's revenue in Q3, reflecting the solid demand for its platform. The company's future pipeline looks promising, with strong momentum in design wins and customer interest. SMCI is ramping up production of its Data Center Building Block Solutions (DCBBS), built on new-generation GPU platforms, which will accelerate future growth. Further, SMCI is a leader in energy-efficient computing, especially through its direct liquid cooling (DLC) technology. Last year, it delivered 4,000 high-powered AI racks equipped with DLC, significantly reducing energy costs for clients. With its next-generation cooling solution DLC-2 on the horizon, SMCI is well-positioned to drive further adoption as companies become increasingly focused on sustainability and cost efficiency. While revenue is expected to climb, its profit margins could remain under pressure. Management has flagged higher inventory reserves for older-generation products as a concern during the Q3 conference call, and gross margin is projected to dip to around 10%, down from 11.2% a year earlier. On the earnings front, the company expects earnings per share (EPS) in the range of $0.40 and $0.50 in Q4. Analysts expect the company to report EPS of $0.35, which reflects a 36.4% year-over-year decline. Analysts' Recommendation for SMCI Stock Ahead of Q4 Earnings Wall Street analysts, while acknowledging the company's momentum, remain conservative. The consensus rating on SMCI is 'Hold,' and the average price target of $43 suggests the stock could see a pullback of more than 25% from current levels. The Bottom Line Super Micro has made a strong comeback from past regulatory and reputational challenges, positioning itself as a key player in high-performance and energy-efficient computing. However, with Q4 earnings on the horizon and the recent rally in its price, expectations are sky-high. Any signs of margin pressure, deferred orders, or cautious management commentary could prompt a sharp correction. While the long-term growth narrative remains intact, SMCI could remain highly volatile in the short term. On the date of publication, Sneha Nahata did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Is SMCI Stock the Next NVIDIA, and Is It Worth Buying?
Following a challenging second half of 2024, investors have expressed a positive outlook on Super Micro Computer, Inc. SMCI, with its shares gaining 97% this year and outpacing NVIDIA Corporation's NVDA gain of 31.6%. So, can Supermicro, a manufacturer of data center components, become the next NVIDIA, and is it a worthwhile investment? Let's explore –- Behind SMCI's Gains This Year and Growth Potential Supermicro's shares surged 10% on Monday after Digi Power X announced a provisional patent for its ARMS 200 modular data center, with SMCI as its exclusive server supplier. The choice of Supermicro indicates that the company may be leveraging advanced, high-value technology. A short-seller tarnished Supermicro's reputation last year, but the stock rebounded to finish the first half of 2025 with a 60.8% increase. This rebound occurred after the company's new auditor, BDO, reviewed the last three years of financial transactions and confirmed that Supermicro's financial statements are fair in all material respects. The company was cleared of all allegations of fraud. Supermicro's shares gained further after the firm announced a $20 billion deal with Saudi Arabian data center operator DataVolt. This deal is part of the Trump administration's strategic partnerships with Saudi Arabia. In the March quarter, Supermicro's revenue growth fell short of market expectations, possibly due to delays in shipments of NVIDIA's Blackwell chips. However, no delays are expected for the June quarter, which could boost Supermicro's revenues and positively influence its share price. Remember, most of the graphics processing units (GPUs) used in Supermicro's systems are NVIDIA chips. Could SMCI Be the Next NVIDIA? Supermicro's gains this year have sparked questions about whether it can replicate NVIDIA's future success. Supermicro's business, which involves integrating several third-party components, is much easier to commoditize compared to NVIDIA's operations. However, developers prefer NVIDIA's CUDA software and artificial intelligence (AI) GPUs over competitors like Intel Corporation INTC and Advanced Micro Devices, Inc. AMD. NVIDIA's products are distinctive and superior to those of its rivals, but some competitors also offer Supermicro's direct liquid cooling method. Additionally, NVIDIA controls over 80% of the AI GPU market, boosting its pricing power. In contrast, Supermicro has only an 8% share in the AI server market, making it premature to crown Supermicro as the next NVIDIA (read more: Is Rigetti the Next NVIDIA, and Should You Buy the Stock?). Should You Buy SMCI Stock Now? Despite recent gains, investors should remain cautious. Major technology vendors are providing intense competition to Supermicro, which is putting pressure on the company's margins. Supermicro's non-GAAP gross margin for the fiscal 2025 third quarter was 9.7%, down from 11.8% in the previous quarter and 15.5% in the same quarter last year. Supermicro also has a debt-to-equity ratio of 38.1%, higher than the Computer- Storage Devices industry average of 32.5%, indicating greater financial risk and increased vulnerability to economic downturns. Nonetheless, the company's growth may be impacted by trade-related uncertainties. Image Source: Zacks Investment Research Supermicro, currently, has a Zacks Rank #5 (Strong Sell), and the Zacks Consensus Estimate of $2.07 for SMCI's earnings per share (EPS) is down by 39.7% from a year ago. Image Source: Zacks Investment Research You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intel Corporation (INTC) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Super Micro Soars As China Rules Ease Riding AI Wave
Super Micro Computer (NASDAQ:SMCI) shot up 10.2% to $60.05 on Monday after Digi Power X tapped it as the exclusive supplier for its ARMS 200 modular data centersand word came that the U.S. might ease some export rules on China. Warning! GuruFocus has detected 7 Warning Signs with SMCI. Under the deal, SMCI will pack each 1 MW pod with up to 256 Nvidia (NVDA) B200 or B300 GPUs, and Digi Power X plans to scale to 40 MW (about 10,240 GPUs) at its Alabama site, kicking off in Q4 2025 and wrapping in early 2026. I t's a big win for SMCI's Data Center Building Block strategy, which leans into flexible, high?density AI workloads. Add in reports the Commerce Department could pause certain China export curbs and you've got a perfect recipe for an order?flow boost next quarter. SMCI heads into its August 5 earnings with analysts looking for $0.45 EPS (down 30% Y/Y) on $5.99 B revenue (up 12.8%). This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
