Super Micro (SMCI) Slashes Guidance—And Still Misses the Mark for Wall Street
Management now expects at least $33 billion in revenue for the fiscal year ending June 2026—down from the $40 billion target it floated in February. Analysts remain skeptical. Consensus (FactSet) is only $30.5 billion, with Mizuho’s Vijay Rakesh forecasting $31B, citing “caution around ramps with competition increasing.”
Margin Pressures Mount Despite Revenue Growth
While demand for AI-optimized servers remains high, analysts warn that **price competition** and **gross margin compression** could limit upside. Rakesh noted Super Micro’s main rivals—including Dell Technologies (DELL) and Hewlett-Packard Enterprise (HPE)—are aggressively cutting prices to capture market share.
J.P. Morgan’s Samik Chatterjee wrote that the combination of falling gross margins and bullish revenue expectations is creating a disconnect: “The underperformance is extending to gross margins as well.”
Market Reaction: Expectations Too High?
Despite beating consensus revenue targets, the stock cratered 17%. Analysts say this move reflects “elevated expectations vs. a significant shift in institutional investor opinions.”
Wedbush’s Matt Bryson noted that while bulls may focus on large AI customer growth potential, bears are watching for “underwhelming revenue guidance and a dearth of gross margin improvement.”
Intraday Trading Setup: SMCI in Play
For traders, SMCI now presents a high-beta opportunity with well-defined risk-reward scenarios:
- Watch for VWAP rejection in the first hour if buyers attempt to fade the gap down
- Opening Range Breakdown setups may trigger further downside if key support fails
- Support zones near the $740–$760 range could become decision points
Pro Tip: Anchor VWAP to the earnings call timestamp and monitor for price/volume divergence. High options volume suggests elevated volatility is likely to persist.
Competitive Landscape: NVIDIA’s Pie Is Getting Sliced
Super Micro has benefited from demand tied to Nvidia’s Blackwell platform, but it’s not alone. With Dell, HPE, and smaller rivals targeting the same customer base, SMCI’s ability to maintain both share and margins is under pressure.
CEO Charles Liang touted the company’s “end-to-end data-center software solution” as a competitive edge—but analysts remain cautious until it materially improves profitability.
Final Thought: Reality Check for the AI Infrastructure Trade
Super Micro’s reset doesn’t end the AI story—it just reminds investors that even darlings of emerging tech must defend their margins and manage competitive risks. For now, SMCI looks like a stock that needs to earn its multiple all over again.