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Super Micro Computer (SMCI) came in below Street estimates in its fiscal second quarter and lowered its guidance for the full year on Feb. 11. The artificial intelligence (AI) server company now sees up to $25 billion in revenue in its current fiscal year – down significantly from the as much as $30 billion it had guided for earlier.
SMCI shares still rallied more than 10% to print a new year-to-date high on Wednesday, Feb. 12.
Why Is Super Micro Stock Rallying on Wednesday?
Investors are reacting positively to a seemingly downbeat earnings release primarily because Super Micro said things will improve materially in its fiscal 2026.
The company’s management guided for up to $40 billion in revenue for the coming year that, if delivered, would mean year-over-year growth of about 60%. Additionally, the Nasdaq-listed firm said it will file its long overdue annual report before the Feb. 25 deadline, signaling that the accounting fiasco is finally behind it.
That’s also making investors flock to SMCI stock on Wednesday.
Is SMCI Stock Out of the Woods Yet?
Super Micro Computer, however, failed to impress everyone with its outlook. JPMorgan analyst Samik Chatterjee reiterated his “Underweight” rating on the AI stock.
Chatterjee expects supply chain constraints to stand in the way of SMCI making good on its promise of hitting $40 billion in revenue in its fiscal 2026. The AI server company will likely see more fierce competition from rivals, including Hewlett Packard Enterprise (HPE) and Dell Technologies (DELL), which could weigh on its margins as well, he added.
Chatterjee’s revised $35 price target on Super Micro stock indicates potential downside of about 15% from current levels.
How Other Analysts See SMCI After Q2 Earnings
Investment firms including Wedbush Securities and Needham, are not entirely convinced that SMCI will be able to meet its guidance for $40 billion in revenue next year either.
Others, however, are increasingly more positive on Super Micro stock following the guidance that its management actually dubbed “conservative” on the earnings call.
The mean target of $49.75 on SMCI shares translates to about 15% upside from Wednesday’s high. Analysts currently see Super Micro Computer growing its earnings by 7.96% year-over-year in its fiscal 2025 followed by a 9.68% YOY increase in its fiscal 2026.
