Supermicro Stock Plunges After AI-Driven Earnings Miss

Current Price: As of Nov 4, 2025, SMCI is trading around $47–48 per share, down roughly 6% on the day. (Shares closed $50.75 on Nov 3 ^[1] ^[2].)
Year-to-Date Move: The stock has doubled over the past year (~+107% YTD) on booming AI/server demand ^[3], though it has recently pulled back ~7% from monthly highs ^[4].
Q1 Results: FY2026 Q1 sales were $5.02B (–15.5% YoY) and GAAP EPS $0.26 (vs $0.67 year-ago) ^[5] ^[6] – both missing analysts’ views. Adjusted EPS was ~$0.35. The miss reflects a shift of some AI “design win” shipments into Q2 ^[7].
Guidance: Management guided Q2 FY2026 revenue $10–11B and FY revenue ≥$36B ^[8] ^[9]. That outlook (presuming $36B FY) implies continued AI-driven growth, well above Wall Street’s ~$7.8B Q2 estimate ^[10].
Analyst Views: Wall Street’s consensus is mixed (majority Hold). Recent analyst notes span Sell (GS target $30) to Buy (Rosenblatt target $60) ratings ^[11]. MarketBeat reports 1 Strong Buy, 6 Buy, 9 Hold, 2 Sell—consensus Hold with avg. target ~$47.6 ^[12].
AI/Data-Center Context: SMCI is a major beneficiary of the AI server boom. Tech giants (Alphabet, Amazon, Meta, Microsoft, etc.) are expected to spend ~$400 billion on AI infrastructure in 2025 ^[13]. Demand for high-powered servers is “insatiable” ^[14], as cloud and enterprise customers rush to deploy LLMs. Nvidia’s stock hit a $5 trillion market cap this fall ^[15], underscoring the central role of its chips (H100, Blackwell) in these systems.
Competition: Dell Technologies and HPE are the biggest rivals. Dell CEO noted massive AI server shipments (over 12 months of AI servers shipped in H1 2025) ^[16]; Dell’s server segment revenue jumped ~69%. HPE saw ~18% server revenue growth in Q3 FY2025 ^[17]. An eMarketer analyst observes Dell’s scale (“volume advantage” over SMCI) in winning contracts ^[18]. Recent reports warn SMCI is ceding some AI server share to larger peers: “customers… are choosing servers from Dell, HP and others,” notes Gil Luria (D.A. Davidson) ^[19].
Tech & Chart Outlook: SMCI’s support is around $49.6 and resistance ~$51.3 (ChartMill) ^[20]. It sits just above its 200-day moving average (~$45.6) and near the 50-day (~$48.3) ^[21]. RSI (~49) is neutral ^[22] and MACD slightly negative ^[23]. Overall trend remains positive (ChartMill technical rating 9/10 bull) but recent volatility suggests caution.
Fundamentals: SMCI trades at a high multiple (trailing P/E ~30.6, PEG ~1.30 ^[24]), reflecting rapid growth expectations. Q1 net profit margin was slim (~4.8%) as costs rose. Consensus estimates call for year-over-year earnings decline in FY2026 due to tough comps and pricing pressure. The stock’s P/S is about 1.5. Management sees long-term growth: CEO Liang said the order book includes “more than $13B in Blackwell Ultra orders” and reiterated a $36B revenue target for FY26 ^[25].

In-Depth Analysis

Recent Price Action and Trends

SMCI has been volatile around early November. After closing $50.75 on Nov 3 ^[26], the stock fell to about $47.6 on Nov 4, 2025. Chart providers show a mid-day price ~$47.88 (–5.66%) ^[27]. This comes on the heels of a strong 2025 run (+90–110% year-to-date ^[28]), driven by AI hype and strong server demand. The last month saw the stock give back a few percent, so Nov 4’s drop reflects profit-taking and reaction to results. Over the past two weeks, SMCI is down ~8% ^[29].

ChartMill technical indicators are mixed: the stock remains in a bullish longer-term trend, but recent momentum has cooled. The RSI at ~49 suggests neither overbought nor oversold ^[30], and the MACD has turned slightly bearish ^[31]. Support is solid around $49.6, resistance near $51.3 ^[32]. The 50-day moving average (~$48.3) is now roughly at today’s price ^[33]; a drop below that could signal further short-term weakness, while the 200-day (~$45.6) offers deeper support ^[34].

Q1 FY2026 Results and Guidance

Supermicro reported Q1 FY2026 (ended Sept 30) financials on Nov 4. Net sales were $5.02B, down 15.5% from $5.94B year-ago ^[35]. GAAP net income fell to $168M ($0.26 per share) from $424M ($0.67) last year ^[36] ^[37]. Adjusted (non-GAAP) EPS was $0.35, below the ~$0.39 Wall Street was modeling. CEO Charles Liang noted execution “disruptions” (some design wins shipping later) but emphasized growth drivers: the backlog includes $13B+ in new orders (Nvidia Blackwell servers), and the firm still expects at least $36B in FY2026 sales ^[38] ^[39].

For Q2 (Dec 2025 quarter), Supermicro guided $10.0–11.0B in net sales ^[40] – well above consensus (~$7.8B ^[41] – reflecting major design wins pushing revenue forward. GAAP EPS guidance was $0.37–0.45, non-GAAP $0.46–0.54 ^[42]. Management’s tone remains bullish on demand (“DCBBS is enabling a broad customer base…”), but near-term, margins are expected to stay depressed (Q1 gross margin ~9.3% vs 13.1% LY ^[43]) as pricing is competitive.

Analyst Commentary and Quotes

Analysts are parsing these mixed signals. Rosenblatt’s Kevin Cassidy praised Supermicro’s flexibility: “The AI data center market is moving very quickly with customers requesting leading edge designs. We believe Super Micro is nimble enough to react to customer requests despite the near-term revenue disruptions.” ^[44]. By contrast, Gil Luria of D.A. Davidson warns that Supermicro is ceding share: “Since we know the market for servers is very strong… [the] disappointing results… are due to share losses. Customers… are choosing servers from Dell, HP and others.” ^[45]. Kim Forrest of Bokeh Capital observes the flip side of high expectations: “The expectations for all things related to AI… have captivated investors. Any softness is met with deep disappointment, which means lower stock prices.” ^[46].

Brokerages are split. Recent notes (via Benzinga and MarketBeat) show wide-ranging targets: Goldman Sachs maintained a Sell (PT $30), JP Morgan a Neutral (PT $43), while Rosenblatt reaffirmed a Buy with PT $60 ^[47]. Barclays (Equal-Weight, PT $45) and Bernstein (Market Perform, PT $46) round out the spectrum ^[48]. Overall, MarketBeat cites 1 Strong Buy, 6 Buy, 9 Hold and 2 Sell ratings on SMCI ^[49], yielding an average price target ~$47.6 (slightly below pre-earnings levels) ^[50]. Some strategists (e.g. Bernstein’s Mark Newman) have become more cautious, while others still tout SMCI’s long-term AI exposure.

AI/Data-Center Market Context

Supermicro operates in the AI/data center infrastructure sector, which is seeing unprecedented demand. Industry reports note that servers represent a critical bottleneck for LLMs and AI workloads. For example, IDC estimates server sales jumped 134% YoY in early 2025, the largest growth in decades ^[51]. Gartner forecasts data center spending up ~60% in 2025, led by AI-optimized systems ^[52]. Major cloud and tech companies (Google, Amazon, Microsoft, Meta, etc.) are collectively budgeted to spend hundreds of billions on AI infrastructure ^[53]. This overall boom underpins SMCI’s narrative: its chassis and motherboards enable custom “data center building block” solutions (including liquid-cooled AI servers) that many customers demand.

Nvidia and AMD are key AI chip suppliers for Supermicro. Nvidia has cemented its lead – its stock hit ~$207 on Oct 29, 2025, valuing the company at $5 trillion ^[54]. Nvidia’s H100/Blackwell GPUs drive most cutting-edge AI servers (including SMCI’s). AMD has also penetrated this space with its Instinct GPUs and EPYC CPUs, but has seen modest data-center growth. A mid-2025 Reuters report noted AMD’s lower DC growth vs Nvidia, which similarly pressured SMCI’s share price ^[55]. U.S. export restrictions on some AMD GPUs (MI300 series) have also weighed on sentiment.

HPE and Dell are the nearest peers to Supermicro in server hardware. Both have reported strong AI demand: Dell’s H1 FY2026 saw its enterprise server segment revenue jump (~69% YoY ^[56]), and HPE’s Q3 FY2025 server sales grew ~18% YoY ^[57]. These giants leverage scale, services, and broad product lines. For example, a Reuters piece highlighted that “Dell has a volume advantage… compared to rivals like Super Micro” ^[58]. In June 2024, HPE traded at ~8.9x forward earnings versus ~23x for SMCI ^[59], illustrating SMCI’s higher-risk/higher-reward valuation. Recently, SMCI has even targeted federal contracts via a new subsidiary (“Super Micro Federal LLC”) launched Oct 29, 2025 ^[60], aiming to supply AI-ready servers to U.S. government agencies.

Technical and Fundamental Outlook

From a technical perspective, SMCI’s long-term trend is up, but near-term indicators warn of consolidation. Chart analysts note key support around $49.6 ^[61]; a break below could invite more selling. Conversely, clearing ~$51–52 could reignite the rally. The stock is now just above its 200-day MA ($45.6) and flirting with the 50-day MA ($48.3) ^[62]. Volume recently ran below average on the sell-off, suggesting limited conviction so far.

Fundamentally, SMCI commands a premium valuation. Its trailing P/E is ~30.6 and PEG ~1.3 ^[63]. (By contrast, larger peers trade in teens.) On a price/sales basis it’s ~1.5x. These multiples reflect expectations of continued robust growth from AI applications. Indeed, management still forecasts ~10-15% annual revenue growth (to $36B in FY26). However, near-term earnings growth is expected to be muted or negative: analysts now look for a year-over-year EPS decline in FY26 (e.g. TipRanks projected EPS $0.38 vs $0.75 in Q1LY ^[64]). Q1’s gross margin collapsed to ~9.3% ^[65] (non-GAAP 9.5%), well below historical norms, due to mix and pricing. Net profit margin was only ~5%. High operating leverage means any weakness can quickly pressure earnings.

Analyst Ratings & Targets

In summary, SMCI’s analyst consensus is cautious. As of Nov 2025, MarketBeat reports one Strong Buy, six Buy, nine Hold, and two Sell ratings ^[66], averaging a Hold with price targets ~$47–48. Benzinga lists some notable calls: e.g. Rosenblatt’s Buy ($60 PT) vs Goldman’s Sell ($30) ^[67]. The consensus $47.6 target suggests limited upside from here, unless SMCI exceeds its lofty guidance. Institutional ratings from Wall Street span Neutral/Equal-Weight to Outperform, reflecting the polarized views. Overall, we see a market that loves Supermicro’s AI exposure but fears its execution challenges and margin squeeze. Investors should watch the next quarters closely: stabilizing chip supply and fulfillment of the big $13B order backlog could validate SMCI’s bull case, while any further execution misses may reinforce the bears.

Sources: Supermicro press releases and filings ^[68] ^[69]; Reuters news (Nov 4, Oct 23, Aug 5) ^[70] ^[71] ^[72]; Benzinga, TipRanks, MarketBeat analyses ^[73] ^[74] ^[75]; and industry reports on AI/server demand ^[76] ^[77] ^[78] ^[79]. All figures and quotes are as reported.