πππAfter the release of its anticipated Q1 fiscal 2027 earnings report,
$SUPER MICRO COMPUTER INC(SMCI)$ skyrocketed 19.8% in a single session. The catalyst? SMCI's bleeding gross profit margins finally stopped falling.
Is this gross margin repair an inflection point marking a return to grace or is it just a beautiful flash in a pan?
Over the past year, Super Micro was growing revenue well but its profit margins were collapsing. The more server racks they sold, the less profitable they become.
The company was buying expensive components & rushing liquid cooling tech to keep up with NVIDIA's Blackwell demands.
Margins dropped to 11.2% leaving investors wondering if SMCI was just a low margin assembly line.
In Q1, non GAAP gross margin was back to 13.4%, beating Wall Street's 12.1% estimate.
As supply chain chokepoints ease & production of liquid cooling blocks reaches scale, things are looking better for SMCI.
Exciting times are ahead for SMCI.
@Tiger_comments
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments