Super Micro Q1 Revenue Forecast Misses Expectations, Shares Plunge 8% - Is Market Trust Waning?

TradingKey - On October 23, AI server manufacturer Super Micro (SMCI) announced that it now expects fiscal Q1 2026 revenue (ending September 30) to be $5 billion, falling short of the earlier prediction of $6-7 billion. This revelation caused its stock to tumble over 8% to $47.92.

The company cited order delivery delays from some customers as the primary reason for the shortfall, resulting in revenue initially expected in Q1 being deferred to Q2.

Despite this, the company maintained its annual outlook, forecasting fiscal 2026 revenue of at least $33 billion, with expectations of improved performance. 

Super Micro CEO Charles Liang emphasized that AI demand from customers is accelerating and the company is expanding its AI market share. The company has secured over $12 billion in new orders set for delivery next quarter. Furthermore, Liang mentioned strong market reception for its newly launched liquid-cooled systems, highlighting robust AI demand.

Raymond James analyst Simon Leopold commented that market trust in Super Micro might be wavering, and the explanation for lower-than-expected Q1 revenue does little to bolster investor confidence.

Historically, Super Micro has repeatedly cut its fiscal 2025 outlook and lowered the initial fiscal 2026 revenue forecast from $40 billion. The company faced delisting from Nasdaq in 2018 for failing to timely submit financial reports and was charged with widespread accounting violations by the SEC in 2020. In 2024, Ernst & Young, the company's auditor, resigned due to concerns over governance and information transparency.

Citigroup Research analyst Asiya Merchant questioned the company's ability to execute the production and shipping of design-win orders within a single quarter. Moreover, she predicted investors would focus on profit margins, as Super Micro targets larger customers and sales opportunities, which could increase sales costs, compress margins, and lead to revenue fluctuations. Merchant rated the stock as "Hold" with a target price of $48.

Leopold further commented that maintaining conservative expectations for Super Micro is reasonable, though he still hopes for the company to outperform. He maintains an "outperform" rating on the stock but anticipates fiscal 2026 revenue to be only $31.9 billion, below the market consensus estimate of $32.1 billion.

Meanwhile, Mizuho Securities analyst Vijay Rakesh noted that although Super Micro is strong in "design-wins," its competitor Dell is capturing market share between mid-sized cloud service providers and enterprise clients and benefits from more favorable financing conditions.