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On Wednesday, JPMorgan analyst Samik Chatterjee adjusted the price target for Super Micro Computer (NASDAQ:SMCI) shares, bringing it down to $36.00 from the previous $39.00. Despite this change, the firm maintained a Neutral rating on the stock. The revision follows the company’s updated guidance for its fiscal third quarter ending in March. According to InvestingPro data, SMCI, currently valued at $21.48B, has demonstrated strong momentum with a 9.42% gain over the past week, despite showing high price volatility.
Chatterjee noted that the revenue shortfall compared to prior guidance does not reflect a broader demand slowdown in the industry or supply chain issues. Instead, it appears to be the result of specific customer decisions affecting platform timing. With limited visibility on Super Micro’s ability to recover the deferred revenue in the subsequent quarter, JPMorgan has tempered its fiscal fourth quarter expectations for the company. This comes despite SMCI’s impressive 125.01% revenue growth over the last twelve months, as reported by InvestingPro.
The analyst also discussed gross margin pressures, pointing out that while Super Micro faces challenges in a competitive market, particularly with Blackwell-based products, the difficulties with Hopper-based products are expected to be temporary. Additionally, the impact of inventory write-downs is seen as a transient issue.
However, the outcome for the fiscal third quarter has implications for investor confidence. According to Chatterjee, the recent events do not bolster Super Micro’s credibility with investors regarding its guidance practices. Consequently, there will likely be increased scrutiny from investors on the company’s future revenue and margin projections, especially those that suggest aggressive growth.
In other recent news, Super Micro Computer has reported lower-than-expected preliminary financial results for the third quarter of fiscal year 2025. The company anticipates net sales between $4.5 billion and $4.6 billion, falling short of its prior guidance of $5.0 billion to $6.0 billion. Furthermore, the GAAP diluted net income per common share is expected to be between $0.16 and $0.17, which is below the previously guided range. Barclays (LON:BARC) analyst George Wang has downgraded the stock’s price target from $59 to $34, maintaining an Equalweight rating due to concerns about the company’s guidance and uncertainty in AI server builds. Supermicro has also achieved significant performance milestones with its new systems featuring NVIDIA (NASDAQ:NVDA) HGX B200 8-GPU, setting AI performance benchmarks. Meanwhile, Defiance ETFs has launched a new exchange-traded fund offering 2X inverse exposure to Super Micro, aimed at investors anticipating a downturn. Additionally, Supermicro has strengthened its leadership team with the appointment of Scott Angel as an independent director and Yitai Hu as General Counsel & Senior Vice President, Corporate Development. These developments highlight the company’s ongoing strategic adjustments and market challenges.
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