NEW YORK, July 27, 2026, 11:12 EDT — In regular trade, shares of Super Micro NASDAQ:SMCI fell as the company confronts liquidity challenges amid a surge in $60 billion of artificial intelligence orders.
- Shares of Super Micro dropped 3.3% as semiconductor stocks turned sharply negative.
- Initial figures for the fourth quarter suggest gross profit could reach $1.87 billion from $11 billion in sales.
- New orders surpassed $60 billion, shifting attention to cash conversion and the strength of commitments.
Shares of Super Micro Computer, Inc. NASDAQ:SMCI dropped 3.3% to $29.10 during Monday morning trading. A sector-wide chip selloff offset last week’s significant margin upgrade.
The stock remained roughly 14% higher compared to its closing level on July 21. The majority of the increase seen after the update was maintained.
Cash conversion is now the key test for investors. Profit expectations have risen much more quickly than sales expectations.
Super Micro projected fourth-quarter revenue close to the lower bound of its $11 billion to $12.5 billion forecast. The company’s preliminary gross margin increased to 15%-17%, up from its previous outlook of 8.2%-8.4%.
| Measure | Prior guide or base | Preliminary Q4 view | Implied change |
|---|---|---|---|
| Revenue | $11.0-$12.5 billion | Projected near the lower boundary | No revision to sales outlook |
| Gross margin | 8.2%-8.4% | 15%-17% | Midpoint climbs by 7.7 points |
| Gross profit at $11 billion sales | $0.90-$0.92 billion | $1.65-$1.87 billion | Increase of $0.73-$0.97 billion |
| New Q4 orders received | — | Exceeds $60 billion | Over 5.4 times the lower sales estimate |
Gross profit numbers and the order ratio use company-supplied data. The company notes these figures are preliminary.
The midpoint gross-profit increase stands at around $847 million, almost twice the previous midpoint figure.
Gross margin stood at 6.3% during the second fiscal quarter, rising to 9.9% in the third quarter. The initial Q4 range represents a further significant increase.
Super Micro secured over $60 billion in fresh orders throughout Q4, amounting to a minimum of 5.4 times its lowest quarterly revenue.
The company anticipates receiving deliveries in upcoming quarters. However, it cautioned that certain orders could still lack firm commitments. Delays or possible cancellations cannot be ruled out.
The conversion holds significance for the balance sheet. Super Micro reported $6.6 billion in operating cash used during the third quarter. By the end of March, the company had $1.3 billion in cash on hand and total debt and convertibles of $8.8 billion.
The company said in June it had secured $7 billion through equity and equity-linked offerings, targeting the purchase of components to fulfill roughly $39 billion in AI orders.
Losses on Monday extended beyond a single session, as the PHLX Semiconductor Index dropped 3.9%, marking its third straight fall. Nvidia Corp. NASDAQ:NVDA slid 3.5%, and Advanced Micro Devices, Inc. NASDAQ:AMD dropped 6.4%.
Shares of other server companies declined as well. Dell Technologies Inc. NYSE:DELL dropped 3.3%. Hewlett Packard Enterprise Co. NYSE:HPE was down 0.8%.
Rosenblatt analyst Sajal Dogra noted that the size of the order reflected an “industry-leading time-to-market advantage.” The firm increased its price target to $45 from $40 and maintained a Buy rating. Rosenblatt Securities
Mizuho’s Vijay Rakesh maintained a Neutral rating while trimming the price target to $34 from $44. The brokerage pointed to possible supply issues with components and memory as well as delays in shell construction.
Risks are still clustered. Certain orders might not be binding. Exposure to customer reliance, tariffs, and an ongoing independent review related to alleged export-control breaches could impact forecasts. Raising equity brings potential dilution risks.
Complete fourth-quarter results will be released after market close on August 11. Investors will evaluate the margin forecast, operating cash flow, and the rate of order conversion.
The market acknowledges the margin recovery for now, but continues to seek proof in cash.
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