The stock of Super Micro Computer (SMCI) is down 10% after the company missed Wall Street’s consensus forecast for its latest financial results.
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The San Jose, California-based company that makes servers to run artificial intelligence (AI) applications and models posted Fiscal first-quarter revenue of $5 billion, which was below the consensus estimate of $5.83 billion.
Earnings per share (EPS) weren’t any better, coming in at $0.35, below forecasts that called for a profit of $0.37. At the end of October, Super Micro Computer released preliminary results that were weak and below analysts’ estimates. The company has struggled to keep pace in the global AI race.
Super Micro Computer’s income statement. Source: The Fly
Forward Guidance
Despite the disappointing print, Super Micro Computer provided upbeat revenue guidance for the current quarter, saying it continues to see strong demand for its servers that run AI workloads. Management forecast revenue in the current quarter of $10 billion to $11 billion. That’s ahead of the $7.83 billion expected on Wall Street.
However, the company’s earnings outlook was below expectations at $0.46 to $0.54 per share versus $0.61 estimated on the Street. Super Micro Computer competes against rivals such as Dell Technologies (DELL) and Hewlett Packard Enterprise (HPE) that make similar AI servers and provide the hardware needed for AI products.
Is SMCI Stock a Buy?
The stock of Super Micro Computer has a consensus Hold rating among 14 Wall Street analysts. That rating is based on four Buy, seven Hold, and three Sell recommendations issued in the last three months. The average SMCI price target of $45.33 implies 4.61% downside from current levels. These ratings could change after the company’s financial results.
