Super Micro Computer Sees Rising AI Demand but Faces Margin Pressure, BofA Says

MT Newswires Live10-21 23:21

Super Micro Computer (SMCI) is seeing strong artificial intelligence server demand and revenue growth, but faces ongoing margin pressure, BofA Securities said in a note Wednesday.

The company raised its fiscal Q1 2027 revenue outlook to $18.5 billion to $19.5 billion, with strong SpaceX (SPCX) spending likely contributing to the upside, the analysts said.

The analysts said they now forecast revenue of $79.6 billion in fiscal 2027, up from $68 billion, and $89 billion in fiscal 2028. Their fiscal 2027 earnings per share estimate also increased to $5.31 from $3.98.

The company also expects fiscal Q1 gross margins of 12% to 12.5%, above prior guidance of 10.4% to 10.8%, but down from 17.6% in the previous quarter, the analysts said.

They added they remain cautious about margins due to pricing pressure, rising component costs, and large deals that typically carry lower margins.

BofA raised its price target on Super Micro Computer to $38 from $33 and kept its underperform rating.

Price: 36.03, Change: +3.56, Percent Change: +10.98

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