Super Micro reports below expectations but remains fundamentally strong

Super Micro’s report for Q4 of fiscal 2025 fell short of investor expectations; however, the company remains in a fundamentally solid condition.

Super Micro Computer, Inc. (NASDAQ: SMCI) reported Q4 2025 revenue of 5.8 billion USD, below analyst expectations of around 5.96 billion USD, primarily due to Nvidia chip supply delays and shifts in contract execution timelines with clients. Adjusted earnings per share (non-GAAP EPS) came in at 0.41 USD, also below forecasts, reflecting margin pressure from higher operating expenses and underutilised capacity. Despite this, the company generated a strong operating cash flow of 864 million USD and continued robust international growth: revenue in Asia rose 91% YoY and in EMEA by 66%. Management confirmed sustained demand from the AI sector and provided guidance for FY2026 with revenue of at least 33 billion USD, supported by the expansion of the hyperscale customer base.

Investors reacted negatively to the Q4 results, with SMCI shares falling 18% on the first day of trading. In addition to key metrics falling short of market expectations, concerns also arose over weak gross margins and the absence of compelling short-term EPS growth, despite a strong revenue outlook for FY2026. Market participants also noted that revenue growth was not accompanied by a proportional increase in profits, suggesting that operational costs and logistical challenges may continue into the next quarter.

This article reviews Super Micro Computer, Inc., outlines its revenue sources, summarises performance for Q3 and Q4 2025, and presents expectations for FY2026. A technical analysis of SMCI is also provided, forming the basis for a share price forecast for Super Micro Computer for the 2025 calendar year.

About Super Micro Computer, Inc.

Super Micro Computer was founded in 1993 by Charles Liang. The company designs and manufactures server hardware, including motherboards, servers, data storage solutions, GPU systems, and other computing technologies. With proprietary manufacturing facilities in the Netherlands, the US, and Taiwan, it can tailor its products to the specific demands of different markets.

Super Micro employs a modular approach to deliver customised solutions for data centres, cloud services, and enterprise clients. The company went public on 29 March 2007, listing on the NASDAQ under the ticker SMCI.

Super Micro Computer, Inc.’s primary revenue streams

Super Micro Computer generates revenue from the following sources:

• Rackmount servers – high-performance servers designed for data centres, cloud computing, and AI workloads
• GPU-optimised systems – servers built for artificial intelligence (AI), machine learning, and deep learning applications
• Blade and multi-module servers – high-density solutions for enterprises and hyperscale environments

• Embedded and IoT systems – encompasses revenue from industrial and edge computing products, including IoT and edge servers used in smart cities, automation, and real-time data processing. It also includes industrial computing solutions for healthcare, telecommunications, and manufacturing
• High-performance networking equipment – Ethernet switches, network adapters, and interconnects for data centres
• High-performance networking equipment – Ethernet switches, network adapters, and interconnects for data centres
• Power supply units (PSUs) and cooling systems – modular, energy-efficient, and redundant power supplies, along with air and liquid cooling solutions

Super Micro’s business model is centred on modular and customisable computing systems catering to enterprises, cloud providers, and the artificial intelligence industry.

Threat of delisting for Super Micro Computer, Inc. on NASDAQ

Super Micro Computer faced serious issues related to accounting practices and corporate governance, which led to the threat of its delisting from the NASDAQ exchange. Between 2014 and 2017, the company committed violations in revenue and expense reporting, prompting an investigation by the U.S. Securities and Exchange Commission (SEC). In 2020, the SEC determined that the company and its former Chief Financial Officer had engaged in accounting violations, resulting in a settlement where Super Micro agreed to pay a fine of 17.50 million USD.

In 2018, Super Micro was temporarily removed from the NASDAQ listing due to delays in submitting its financial reports. The company failed to publish up-to-date financial data for nearly two years, causing concern among investors and regulators.

In 2024, the company again found itself at the centre of a scandal following the publication of an investigation by Hindenburg Research. The report alleged that Super Micro was engaged in questionable accounting practices and had ties to suppliers controlled by relatives of its CEO. These allegations sparked a new wave of doubts over the transparency of the company’s financial reporting.

An additional blow came when Super Micro decided to delay filing its annual report for the 2024 fiscal year, leading to a warning from NASDAQ about the possibility of delisting. The situation worsened in October 2024 when the auditing firm Ernst & Young declined to continue working with Super Micro, citing issues with internal controls, corporate governance, and potential violations of accounting practices. The auditor’s departure further exacerbated investor suspicions, contributing to a decline in the company’s stock price.

In response to the crisis, Super Micro’s Board of Directors established a special independent committee to investigate the allegations made by Ernst & Young and Hindenburg Research. In December 2024, the committee concluded its investigation, stating that there was no evidence of fraud or misconduct by the company’s management. Following this, NASDAQ granted Super Micro an extension until February 2025 to address its violations and submit all required reports.

Super Micro successfully avoided delisting by submitting a compliance restoration plan and appointing BDO USA as its new auditor. NASDAQ granted the company an extension until 25 February 2025 to submit the 10-K and 10-Q reports for the quarters ending 30 September and 31 December 2024. The company submitted all the required documents by the 25 February deadline, restoring its compliance with NASDAQ’s requirements and maintaining its listing. As a result, the delisting did not occur, but the episode highlighted serious issues with the company’s internal processes and eroded investor confidence.

Super Micro Computer, Inc. Q2 2025 financial report

On 25 February, amid the threat of delisting, Super Micro Computer released its Q2 2025 financial report for the quarter ending 31 December 2024. Below are the key figures:

• Revenue: 5.68 billion USD (+54%)
• Net profit: 320.59 million USD (+8%)
• Earnings per share: 0.51 USD (no change)
• Gross profit: 670.02 million USD (+18%)

Charles Liang, Chair and CEO of Super Micro, described Q2 FY2025 as relatively strong despite challenges, highlighting a 54% year-on-year revenue increase. This growth was driven by robust demand for AI solutions from both existing and new customers. He acknowledged certain obstacles, including cash flow pressures and market concerns regarding the delayed financial report. Liang identified the transition from Nvidia Hopper to Blackwell GPUs as a key growth factor, with supply expected to increase in the current quarter (Q3 FY2025).

CFO David Weigand provided further details, noting that gross margin stood at approximately 11.9%, down from 13.1% in Q1 FY2025, due to changes in product mix and customer base. He emphasised that AI-related platforms accounted for over 70% of revenue, reinforcing the company’s strong position in the enterprise and cloud provider markets.

For Q3 FY2025, ending 31 March 2025, the company projected revenue in the range of 5.00-6.00 billion USD, signalling continued growth, although at a more moderate pace due to competitive dynamics in the AI server market.

Charles Liang has set an ambitious target of 40.00 billion USD in revenue by early FY2026, citing underutilised production capacity in Malaysia, the US, and Taiwan. He underscored Super Micro’s leadership in direct liquid cooling (DLC) technology, forecasting that over 30% of new data centres globally will adopt this technology within 12 months, positioning SMCI as a key player in this transition. Liang also highlighted plans to expand manufacturing operations in Europe, the US, and Taiwan to meet growing demand, particularly for AI infrastructure solutions.

Super Micro Computer, Inc. Q3 2025 financial year report

On 6 May, Super Micro Computer published its Q3 2025 financial report for the quarter ending 31 March 2025. Below are the key figures:

• Revenue: 4.60 billion USD (+19%)
• Net profit: 108.77 million USD (-73%)
• Earnings per share: 0.31 USD (-53%)
• Gross profit: 440.21 million USD (-27%)
• Gross margin: 9.6% (-590 bps)

Super Micro recorded revenue of 4.6 billion USD, slightly above the revised forecast but still below Wall Street expectations, which had been buoyed by the AI euphoria earlier this year. Adjusted earnings per share stood at 0.31 USD, also lower than in previous quarters, suggesting that the hypergrowth phase had begun to slow, at least temporarily. Management attributed the shortfall to delays in customer orders and uncertainties in the supply chain.

A major strength remains the long-term driver of widespread AI infrastructure adoption. Super Micro is at the centre of this trend, producing high-density server systems with liquid cooling that hyperscale clients actively purchase. A recent partnership with DataVolt demonstrates that the company is expanding its presence in the Middle East, where a data centre boom is underway.

Financially, the company appears stable, holding approximately 1.4 billion USD in cash on its balance sheet, although debt remains significant – around 1.9 billion USD – and is rising. Moreover, much of the revenue growth in recent quarters has come from a very narrow segment: AI servers. Should this market cool (for example, due to saturation or increased competition from Dell, HPE, and NVIDIA), it would put pressure on margins.

The company’s guidance for Q4 2025 anticipates revenue of 5.6–6.4 billion USD and earnings per share in the range of 0.40–0.50 USD. However, the full-year revenue forecast has been lowered to 21.8–22.6 billion USD from the previous estimate of 23.5–25.0 billion USD, citing delayed customer spending and economic uncertainty.

Super Micro Computer, Inc. Q4 2025 financial report

On 5 May, Super Micro Computer, Inc. published its Q4 2025 financial report for the period ended 30 June 2025. Key financial results are as follows:

• Revenue: 5.76 billion USD (+7%)
• Net profit: 195.15 million USD (-34%)
• Earnings per share: 0.41 USD (-24%)
• Gross profit: 544.10 million USD (0%)
• Gross margin: 9.5% (-590 bps)

Super Micro Computer, Inc.’s Q4 2025 results came in below expectations. Revenue reached 5.8 billion USD versus forecasts of around 5.96 billion USD, primarily reflecting changes in contract terms with major clients and delays in the delivery of key components, including Nvidia GPUs. Non-GAAP earnings per share were 0.41 USD, also below market expectations. Non-GAAP gross margin declined to 9.5%, continuing its downward trend amid rising costs, including personnel, taxes, and logistics.

On a positive note, operating cash flow reached 864 million USD, reflecting strong conversion of revenue into cash and indicating resilient operational efficiency. Despite short-term challenges, the company delivered robust international growth: revenue in the Asia-Pacific region increased by 91% YoY, in EMEA by 66%, while the US market recorded a 33% decline.

Management reaffirmed its strategic focus on expanding the hyperscale and AI client base, targeting 6–8 major customers in FY2026. Guidance for Q1 FY2026 projects revenue in the range of 6–7 billion USD and non-GAAP EPS of 0.40–0.52 USD. For the full FY2026, the company expects revenue of at least 33 billion USD. However, some analysts consider this forecast overly optimistic, citing intensifying competition, declining margins, and reliance on a limited number of key clients.

Analysis of key growth drivers and risks for Super Micro Computer, Inc.

In Q4 FY25, Super Micro faced several challenges that collectively had a negative impact on revenue and profitability:

• Nvidia chip supply delays: Super Micro heavily relies on Nvidia GPUs in its high-performance servers for AI workloads. Due to a global shortage of these components and supply chain congestion, the company was unable to fulfil some orders on time. This directly affected quarterly sales volumes and delayed revenue recognition, despite the presence of established demand
• Changes in contract terms with a major client: one of the key hyperscale clients revised the implementation schedule and technical requirements for orders. As a result, the company could not recognise revenue from these contracts during the quarter, further reducing the outcome. This highlights the dependence on a limited number of major clients and their significant bargaining power
• Rising costs and declining profitability: non-GAAP gross margin fell to 9.5% from 10.2% a year earlier, signalling higher cost pressures. This was due to increased logistics expenses, higher personnel and compensation costs, changes in supply chain structure, and tax and duty pressures
• Regional revenue imbalance: sales in the US, which previously accounted for a significant share of revenue, declined by 33% YoY. This may be due to temporary fluctuations in local demand, as well as competition and stricter requirements from US clients. At the same time, international markets showed strong growth, temporarily altering the geographic composition of sales
• Heightened competitive pressure: rivalry in the server and AI solutions segment has intensified, with players such as Dell Technologies Inc (NYSE: DELL), Hewlett Packard Enterprise Co (NYSE: HPE), Lenovo, and new ODM suppliers challenging Super Micro’s position. This constrains pricing flexibility and limits the company’s ability to maintain high margins

Despite these short-term challenges, Super Micro retains strong fundamental growth drivers for financial performance in the coming quarters:

• Deferred demand for GPU-based server solutions: the Nvidia supply disruption resulted in some orders not being fulfilled in Q4 and their revenue not being recognised. However, this does not indicate a loss of demand – most of these orders will be completed in the upcoming quarters once logistics recover. This provides a revenue backlog that will translate into future periods, creating a revenue-shift effect and driving revenue and profit growth in FY2026
• Return to normal contract execution with major clients: changes in contract terms with key hyperscale clients (e.g., shipment delays and configuration changes) also temporarily slowed revenue recognition. Once the new requirements are implemented and deliveries resume, the company can account for previously deferred income. This will support accelerated financial growth against a weak prior-quarter base
• Sustained demand for AI infrastructure and scalable server platforms: Super Micro continues to expand its portfolio of AI-computing solutions, including high-density GPU platforms, customised rack-scale servers, and pre-configured modules for hyperscale data centres. The global AI adoption trend is driving strong demand, particularly from large hyperscale clients and cloud providers
• Geographic expansion: revenue growth in Asia and EMEA in Q4 indicates expansion of the client base beyond the US. Increased international shipments help reduce reliance on the US hyperscale segment and enhance revenue resilience. This also helps mitigate local demand dips in specific regions
• Growth in operating cash flow and investment potential: operating cash flow in Q4 reached 864 million USD, reflecting effective working capital management even amid supply disruptions. These funds can be directed towards further automation, faster assembly, and development of production infrastructure, creating opportunities to scale the business as normal supply conditions return
• Strong market position in the custom solutions niche: Super Micro differentiates itself from large OEM suppliers by offering flexible, customisable server solutions with a short time-to-market. This provides the company with a competitive advantage in rapidly evolving hyperscale client requirements, particularly in AI, where standardised solutions often fall short

Conclusion: despite weak results in the past quarter, Super Micro’s fundamental position remains strong. The company faced temporary operational disruptions but has accumulated significant deferred demand, which is expected to convert into accelerated revenue and profit growth in the upcoming quarters. Sustained interest in AI infrastructure, expansion of international sales, and growth of the hyperscale client base continue to function as key drivers, helping to offset short-term risks and support the recovery of financial performance in FY2026.

Fundamental analysis of Super Micro Computer, Inc.

Below is a fundamental analysis of SMCI following Q4 FY2025:

• Liquidity and access to financing: as of 30 June 2025, cash and cash equivalents stood at 5.17 billion USD, with current assets at 12.47 billion USD. The company improved its liquidity, with a net cash position of 412 million USD (assets minus debt), up from 44 million USD in the previous quarter.

In June, 2.3 billion USD of convertible bonds were issued at a highly favourable 0% interest rate, significantly strengthening the balance sheet. In July, the company opened an additional 1.8 billion USD credit line, which can be used to finance accounts receivable as needed.

• Debt and leverage: as of 30 June, total bank debt and convertible bonds amounted to 4.8 billion USD, resulting in a moderate debt load. Thanks to substantial cash reserves and new financing, the company maintained a net cash surplus, demonstrating a disciplined capital structure and short-term resilience.
• Cash flow: in Q4, Super Micro generated 864 million USD of operating cash flow, well above 627 million USD in the prior quarter. Capital expenditures and investments totalled just 79 million USD, producing free cash flow of 841 million USD in the quarter. For the full year, operating cash flow reached 1.7 billion USD, relative to an outflow in the prior year. This demonstrates the company’s increasing capacity to generate internal resources to fund growth.

Conclusion on SMCI’s fundamental analysis: Super Micro ended Q4 FY2025 with strong liquidity, robust operating cash flow, and substantial free cash flow. The raised capital and improved liquidity provide flexibility to finance growth, service debt, support share repurchases and invest in the development of AI infrastructure solutions.

Expert forecasts for Super Micro Computer, Inc. stock

• Barchart: 4 of 18 analysts rated SMCI shares as Strong Buy, 3 as Moderate Buy, 8 as Hold, 1 as Sell, and 2 as Strong Sell. The upper price target is 60 USD, while the lower at 15 USD
• MarketBeat: 7 of 18 analysts gave a Buy rating, 9 recommended Hold, and 2 assigned a Sell rating. The upper price target is 60 USD, with the lower at 27 USD
• TipRanks: 5 of 16 analysts rated the shares as Buy, 8 as Hold, and 3 as Sell. The upper target is 70 USD, with the lower at 15 USD
• Stock Analysis: 4 of 18 analysts rated SMCI shares as Strong Buy, 2 as Buy, 11 as Hold, and 1 as Sell. The upper price target is 60 USD, with the lower at 34 USD

Super Micro Computer, Inc. stock price forecast for 2025

In June 2025, SMCI shares broke above the descending trendline, signalling the end of the downtrend that began in March 2024. By August 2025, an upward channel could be drawn based on lows around 18 USD (November 2024) and 27 USD (March 2025). Based on Super Micro Computer’s stock performance, the following scenarios for SMCI share movement in 2025 are considered:

The primary forecast for Super Micro Computer shares anticipates a test of support at 40 USD, followed by a rebound and a rise within the upward channel, targeting resistance at 66 USD.

The alternative forecast for Super Micro Computer stock assumes a breach of the 40 USD support level, leading to a decline towards support at 27 USD. This level coincides with significant technical support and fundamental attractiveness: at this price, the shares would trade at a P/E of around 16, potentially appealing to value-oriented and institutional investors, given the company’s sustained growth in free cash flow. Consequently, renewed demand is expected at 27 USD, with the first recovery target at 40 USD.

Risks of investing in Super Micro Computer, Inc. stock

Investing in Super Micro Computer stock carries several factors that could negatively impact the company’s revenue and profits, ultimately affecting investor returns:

• Accounting issues: SMCI has a history of delays in financial reporting, including restatements and a fine of 17.50 million US dollars imposed by the SEC in 2020 for serious accounting violations
• Dependence on major clients: a significant portion of SMCI’s revenue comes from a few key customers. Recent financial reports indicate that one of its largest clients accounted for approximately 22% of total revenue. Such high dependency poses risks, especially if these clients significantly reduce their order volumes
• Increasing competition: the AI server market is becoming increasingly competitive. Companies like Dell Technologies (NYSE: DELL) and Wistron Corp. are actively developing similar solutions, which could lead to a decline in SMCI’s market share and put pressure on its profit margins
• Stock sales by executives: recent large-scale stock sales by SMCI’s CEO and CFO have raised investor concerns about the company’s future prospects

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