Super Micro Computer (NASDAQ: SMCI) shares plunged on Wednesday, trading at $46.88 at press time, down 18% on the day and at one point sliding as much as 20%.
The drop extends a bearish week where the stock has lost 24%. Despite the pullback, SMCI remains up 56% year-to-date.
Why SMCI stock is down
The selloff followed Super Micro’s disappointing fiscal fourth-quarter results. For the quarter, the technology firm reported adjusted earnings of $0.41 per share, missing Wall Street’s estimate of $0.45 and down from $0.63 a year ago. Revenue rose 8% year-over-year to $5.8 billion but still fell short of the expected $6 billion.
Analysts were also troubled by the adjusted gross margin, which dropped to 9.6% versus the expected 10%.
On the earnings call, CEO Charles Liang cited production scaling challenges due to limited working capital, which the company sought to resolve through a $2.3 billion convertible bond offering in June, following a $700 million raise in February.
Looking ahead, Super Micro issued weaker-than-expected guidance for its fiscal first-quarter revenue and earnings. However, it struck a more optimistic tone for the long term, projecting $33 billion in revenue for fiscal 2026, far above analysts’ $20 billion estimate.
Wall Street’s take on SMCI stock
On the other hand, not all analysts are convinced. For instance, Bank of America’s Ruplu Bhattacharya reiterated an ‘Underperform’ rating and a $37 price target, citing continued margin pressure.
He warned that customers may be delaying purchases ahead of Nvidia’s next-gen GPUs. At the same time, aging inventory remains a headwind, an issue likely to persist as Nvidia and AMD release more advanced chips.
However, Needham took a more bullish stance, maintaining a ‘Buy’ rating and raising its price target from $39 to $60. The firm sees potential for margin recovery and highlighted growth opportunities in new markets, along with momentum in Direct Liquid Cooling and Building Block Solutions.
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