Key Takeaways
- Shares of SMCI declined 3.1% to reach $29.38 on Thursday amid widespread weakness in artificial intelligence and chip stocks
- Market sentiment was impacted by Elon Musk’s statement that his ventures would exclusively utilize Nvidia chips, affecting related AI hardware companies
- The company disclosed a substantial backlog exceeding $60 billion and upgraded its gross margin outlook to a range of 15%-17%
- Fourth-quarter results are scheduled for release on August 11; analysts project earnings per share of $0.92, representing 124% annual growth, alongside revenue of $11.60 billion
- The Street’s consensus rating stands at “Hold” with a mean price target of $38.40, suggesting approximately 31% potential upside
Shares of Super Micro Computer experienced a 3.1% decline on Thursday, settling at $29.38, as part of a broader selloff impacting artificial intelligence and semiconductor equities.
Super Micro Computer, Inc., SMCI
The downturn followed remarks from Elon Musk indicating his companies would utilize Nvidia chips exclusively. This statement triggered a negative reaction throughout the AI hardware sector, impacting companies that compete with or complement Nvidia in the data center infrastructure ecosystem.
Thursday’s trading volume registered approximately 26.4 million shares, marking a roughly 40% decrease from the typical daily volume of 43.6 million. The previous session had seen the stock close at $30.32.
Over the trailing twelve months, SMCI has declined 37%, while remaining relatively unchanged on a year-to-date basis. The company’s current market capitalization stands at $17.67 billion.
The recent weakness also suggests some investors are locking in gains following a solid rally. Market participants are evaluating whether the stock’s present valuation adequately reflects the company’s projected expansion trajectory.
Fourth Quarter Results Expected August 11
Investor attention is now concentrated on August 11, when SMCI is scheduled to unveil its fiscal fourth-quarter financial performance.
The Street anticipates earnings per share of $0.92, marking a substantial increase of over 124% compared to the prior year period. Projected revenue stands at $11.60 billion, reflecting 101% annual growth.
During a preliminary announcement last month, SMCI disclosed an order backlog surpassing $60 billion. Management also elevated its gross margin forecast to a range of 15% to 17%, a significant improvement from the earlier guidance of 8.2% to 8.4%.
In its last reported quarter, SMCI delivered earnings per share of $0.84, exceeding the consensus estimate of $0.63. Revenue totaled $10.24 billion, up 122.7% year-over-year, though falling short of analyst expectations of $12.39 billion.
Wall Street Ratings and Shareholder Structure
Notwithstanding the impressive backlog, analyst sentiment remains measured. The consensus recommendation is “Hold” with an average price objective of $38.40, indicating roughly 31% upside potential from present levels.
Mizuho reduced its price target from $44 to $34 with a neutral stance in late July. Rosenblatt maintains a $45 target paired with a buy rating. JPMorgan has established a $32 target with a neutral outlook. Citigroup reaffirmed its neutral position with a $33 price objective.
Among analysts tracking SMCI, four maintain Buy ratings, twelve recommend Hold, and two rate the stock as Sell.
Regarding ownership structure, Vanguard commands the largest institutional position at 10.28%, marginally exceeding CEO Charles Liang’s 10.26% stake. Institutional investors and hedge funds together control 84.06% of outstanding shares.
SMCI recently conducted its seventh annual Open Storage Summit, which brought together 38 industry experts representing 21 technology partners such as AMD, Intel, IBM, and Western Digital. The conference emphasized AI inference and enterprise storage solutions, though it doesn’t directly generate near-term revenue.
The stock’s 50-day moving average is currently positioned at $31.80, while the 200-day moving average stands at $30.48.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
