Key Takeaways
- SMCI shares dropped approximately 3% on Tuesday, retreating after climbing nearly 60% in the previous month
- Fourth quarter FY26 earnings per share of $1.70 exceeded the 62-cent forecast, while revenue of $11.12B fell short of the $12.33B consensus
- Both Barclays and Mizuho increased their price objectives while maintaining neutral ratings
- The company’s gross margin improved to 17.6% in Q4, though projections show a steep decline to 10.6% for Q1 FY27
- Analyst consensus remains at Hold, with a mean price target of $40.85
Shares of Super Micro Computer (SMCI) declined roughly 3% during Tuesday’s trading session, surrendering a portion of recent gains following a robust rally and lukewarm Wall Street response to the company’s latest financial results.
Super Micro Computer, Inc., SMCI
At the time of reporting, the stock was changing hands at $37.13, representing a 3.03% decline for the session. Despite Tuesday’s weakness, SMCI maintains a 28% gain year-to-date.
The session’s decline came after an impressive near-60% advance over the preceding month. Such explosive moves often invite profit-taking, which appeared to materialize on Tuesday.
Broader market headwinds contributed to the selloff. President Trump’s announcement dismissing any extension of the 60-day ceasefire framework with Iran rekindled geopolitical concerns, driving crude oil prices upward and pressuring equities across the board.
The fiscal Q4 2026 earnings report from SMCI presented a split picture. While adjusted earnings per share reached $1.70, significantly surpassing the Street’s 62-cent projection, revenue registered at $11.12 billion, falling short of the anticipated $12.33 billion.
Company leadership attributed the shortfall to data center infrastructure challenges, encompassing power allocation, liquid cooling implementation, and network configuration, rather than softening demand fundamentals.
The firm disclosed a record backlog featuring more than $60 billion in fresh Q4 orders. Additionally, it provided Q1 FY27 revenue guidance ranging from $14.5 billion to $15.5 billion, alongside a full fiscal 2027 revenue projection between $65 billion and $72 billion.
A positive highlight emerged in Q4’s gross margin performance, which expanded to 17.6%, substantially exceeding previous guidance of 8.2% to 8.4%.
Wall Street Bumps Targets While Maintaining Caution
Multiple analysts adjusted their price objectives upward following the earnings release, though bullish ratings remained elusive.
Tim Long of Barclays increased his price target to $39 from $38 while retaining an Equal Weight rating. He expressed concern regarding the lack of transparency surrounding the $60 billion in new orders, noting that specifics and forward visibility remain murky.
Vijay Rakesh at Mizuho modestly elevated his target to $35 from $34, also keeping a Neutral stance. He highlighted expectations for a substantial gross margin compression in Q1 FY27, projecting a sequential decline of approximately 700 basis points to 10.6%, attributable to product mix shifting back toward AI server configurations.
Rakesh noted mounting competitive pressures from Dell and other players, along with potential challenges if hyperscale customers pivot toward proprietary AI chip solutions.
Nehal Chokshi of Northland delivered the most aggressive target adjustment, raising his objective to $43 from $36, while nonetheless maintaining a Market Perform rating. He emphasized corporate governance questions, particularly regarding the decision to reinstate co-founder Wally Liaw following his 2018 departure amid previous complications related to sales practices and accounting procedures.
Consensus Outlook on Wall Street
Current analyst consensus stands at Hold, derived from 11 Hold ratings, three Buy recommendations, and two Sell ratings. The average price target of $40.85 suggests approximately 9.2% upside potential from present levels.
From a technical perspective, the stock trades above both its 20-day and 200-day moving averages, though a “death cross” pattern that materialized in December 2025 remains a concern for the longer-term technical outlook.
Benzinga Edge assigns SMCI a Bullish rating on Quality (91.19) and Value (90/100), with Growth also registering positively at 79.84.
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