Super Micro Computer, Inc. SMCI recently issued a strong revenue guidance for fiscal 2026 and aims to meet regulatory obligations by Feb. 25. Should one invest in Supermicro stock now or wait? Let’s see –
Super Micro Foresees Strong 2026 Revenues
Late Tuesday, Supermicro released its preliminary fiscal second-quarter results ending on Dec. 31, which missed its previous guidance. The San Jose, CA-based company expects fiscal second-quarter revenues between $5.6 billion and $5.7 billion, below the prior forecast range of $5.5-6.1 billion at the midpoint.
Supermicro also trimmed the full fiscal 2025 revenue outlook. The company expects revenues between $23.5 billion and $25 billion for the full year, below the prior estimate of $26-30 billion. However, CEO Charles Liang expects the company to perform much better in 2026 and achieve revenues of $40 billion, way above the present consensus of $29.2 billion.
Next year, revenues are estimated to grow due to strong demand for Supermicro’s data center solutions. Liang expects over 30% of new data centers to use Supermicro’s direct-liquid cooling (“DLC”) technology in the next 12 months, driving sales up. DLCs are popular for addressing AI data centers’ heat issues.
3 More Reasons to be Bullish on SMCI Stock
With Amazon.com, Inc. AMZN and Alphabet Inc. GOOGL increasing their artificial intelligence (AI) and cloud services, Supermicro certainly faces challenges in the AI data center sector. However, Supermicro’s collaboration with NVIDIA Corporation NVDA through the Blackwell platform has enhanced its AI data center capabilities. This synergy boosted Supermicro’s AI computing power, curtailed operational expenses, lured more clients to its data centers, and bolstered its market position.
AI data centers are increasingly focused on reducing their carbon footprint. Supermicro uses renewable energy sources and energy-efficient technologies in its operations, which gives the company a competitive edge as environmental norms tighten worldwide.
Supermicro, late Tuesday, said that management expects to file the 10-Q report for the quarter ending in September and the 10-K report for the fiscal year ending June 30 with the SEC by the Feb. 25 deadline and avoid getting delisted from the Nasdaq Stock Exchange. Supermicro has appointed a new independent auditor promptly to file reports and restore investors’ trust.
How to Trade SMCI Stock Now
Supermicro’s strong next-year revenue growth projections, partnership with NVIDIA, sustainable practices and new auditor appointment bode well for the stock, making it advisable to hold for long-term gains. The company also showcases strong profitability, with its return on equity of 34%, surpassing the industry average of 20.4%.
Image Source: Zacks Investment Research
From a valuation perspective, the Supermicro stock also appears more reasonably priced, given its recent business performance. This is because SMCI stock’s price/earnings ratio is 14.01, lower than the Computer- Storage Devices industry’s average of 21.94. However, new investors should consider investing post Feb. 25, for better financial insight.
Image Source: Zacks Investment Research
Supermicro stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
