Key Highlights

• SMCI shares rose 6% to $31.13, after reaching an intraday high of $31.34 on Friday.
• The company said it secured more than $60 billion in AI server orders in a single quarter, building an unprecedented backlog.
• Management raised gross margin guidance to 15% to 17%, roughly double the prior range of 8.2% to 8.4%.
• Super Micro is seeking $7 billion in equity-linked financing to help fund order fulfillment.
• The company is scheduled to report quarterly results on August 11, while Wall Street analysts have set a consensus price target of $39.21 and a Hold rating.

Shares of Super Micro Computer advanced 6% to close at $31.13 on Friday after trading as high as $31.34 earlier in the session. Even after the gain, the stock remains well below its 52-week high of $58.78.

Super Micro Computer, Inc. (SMCI)

The move came as investors weighed rising confidence in demand for AI infrastructure against a detailed preliminary quarterly update that included several notable figures. Super Micro competes with Dell, HP Enterprise, and other server manufacturers for AI-related orders, and its close partnership with Nvidia on GPU-integrated systems has been a key demand driver as hyperscalers such as Microsoft, Meta, Amazon, and Google continue ramping data-center spending.

The company said it booked more than $60 billion in new AI server orders during its fiscal fourth quarter, which ended on June 30. That pushed its backlog to an all-time high as Super Micro enters fiscal 2027.

Revenue for the quarter is expected to come in near the lower end of the company's $11 billion to $12.5 billion guidance range. While that would fall short of some expectations, the profitability outlook appeared stronger.

Super Micro now expects gross margins of 15% to 17%. That is a significant increase from its earlier forecast of 8.2% to 8.4%, effectively doubling the company's prior margin outlook. If sustained, the improved margin profile would mark a meaningful shift for a company that has historically competed on price and operated at the lower end of the server-industry margin range.

Market Hesitation Despite Strong Order Book

Despite the large pipeline, investor enthusiasm remains restrained. Supermicro said some of the orders are not backed by firm commitments, leaving them subject to possible cancellations or delays.

The company also plans to raise $7 billion through equity-related financing to help buy the components needed to complete those orders. That plan has raised concerns about potential dilution for existing shareholders.

In addition, an independent board investigation into certain transactions tied to possible export control violations is still underway. The preliminary financial figures have not yet been reviewed by an independent auditor. The investigation follows a period of governance scrutiny that included Deloitte's resignation as the company's auditor in late 2024 and a delayed annual filing that had previously threatened the company's Nasdaq listing.

Those uncertainties have left the stock trading at a price-to-earnings ratio of 16.47 and a PEG ratio of 0.36, reflecting near-historic valuation compression.

Earnings Report Focus Points

Attention now turns to the company's August 11 earnings release. Investors are looking for more detail on how much of the $60 billion backlog will turn into revenue, as well as whether the improved margin profile can be sustained.

In its previous quarterly update in May, Super Micro reported earnings per share of $0.84, beating the $0.63 analyst estimate. Revenue came in at $10.24 billion, below the $12.39 billion forecast, but still represented 122.7% year-over-year growth.

Wall Street remains split on the stock. Four analysts rate it Buy, 12 rate it Hold, and two rate it Sell. The average price target is $39.21.

Rosenblatt Securities has a $45 target and a Buy rating. Goldman Sachs maintains a Sell rating. Wedbush cut its target from $42 to $34 while keeping a Neutral stance.

Institutional investors own 84.06% of outstanding shares. Several funds increased their positions in the second quarter, including Baird Financial Group, which lifted its stake by 54.9%.

The stock's 50-day moving average is $31.56, while its 200-day moving average is $30.46, leaving the current share price near both technical levels.