Super Micro Computer Inc. released preliminary results for its fourth fiscal quarter on Tuesday, July 21st, with expected gross margins significantly exceeding prior guidance. A record level of new orders further boosted market confidence, sending the stock soaring over 20% in after-hours trading.
The preliminary report indicates that for the fourth quarter ending June 30, 2026, the company expects both GAAP and non-GAAP gross margins to be between 15% and 17%. This range is nearly double the prior guidance of 8.2% to 8.4%. Management attributed this outperformance to a "favorable customer structure and product mix." Concurrently, the company secured over $60 billion in new orders for the quarter, a historical high, which locks in a substantial future delivery pipeline.
This positive news prompted a swift market repricing. Shares of SUPER MICRO COMPUTER INC surged as much as 21% in after-hours trading. This movement signals a notable reversal in investor sentiment, as the stock had previously been nearly cut in half from its early June highs. The company's complete fourth-quarter and fiscal 2026 results are scheduled for official release after the market close on August 11th.
Unexpected Doubling of Margins Redefines Profit Story
The gross margin performance is the core metric from the preliminary results that captured the market's focus. The company's previous guidance for the fourth quarter was a gross margin of only 8.2% to 8.4%. The latest estimated range of 15% to 17% signifies that actual performance will far surpass expectations, essentially doubling.
This improvement did not happen overnight. The company's gross margin had touched a low of 6.3% in the second quarter of fiscal 2026. At that time, CEO Charles Liang attributed it to shifts in customer structure, tariff pressures, and shortages of key components like memory. The margin recovered slightly to 9.9% in the third quarter, and the current fourth-quarter leap suggests the company is gaining pricing power in the AI server solutions space.
During the most recent earnings call in May, Liang stated the company was committed to achieving a sustainable double-digit gross margin target by prioritizing the enterprise market and its Data Center Building Block Solutions business. The preliminary data indicates this goal has been met ahead of schedule.
$60 Billion Record Order Backlog Signals Robust Demand Outlook
Beyond margins, the record order size also emerged as a key highlight for the market. The company disclosed that new orders in the fourth quarter alone exceeded $60 billion, setting a new record that will be fulfilled over the coming quarters.
This figure directly reflects robust market demand for the company's modular data center solutions and confirms the ongoing investment boom in AI infrastructure. The company is seeking to transform from a server designer and manufacturer into a full-stack data center solutions provider, and the massive order backlog provides strong support for this strategy.
It is worth noting that the company also expects fourth-quarter revenue to be near the lower end of its $11 billion to $12.5 billion guidance range. However, the market's reaction to this was muted—investors clearly placed greater value on the recovery in profitability and the strength of forward-looking demand indicators rather than the absolute size of short-term revenue.
The after-hours surge also represents a stage of sentiment recovery for the stock following a series of negative events.
In early June, the company announced plans to raise $7 billion in equity financing to support surging AI server orders, sparking market concerns over equity dilution and excessive spending. This led to a significant stock decline, with a cumulative drop of nearly 50% from the June 9th high to the present. The unexpected margin jump and record orders have now provided a substantial catalyst for the previously pressured stock to rebound.
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