A weak quarter is no obstacle: upbeat forecast supports Super Micro Computer share price rally

Super Micro Computer’s revenue fell short of expectations, but optimistic forecasts for growth pushed SMCI shares higher

Super Micro Computer (NASDAQ: SMCI) reported revenue of 4.6 billion USD and adjusted earnings per share of 0.31 USD for Q3 of the 2025 financial year, slightly exceeding its revised guidance but missing analysts’ expectations due to order delays and ongoing macroeconomic uncertainty. The company also announced a major multi-year agreement with DataVolt worth 20 billion USD.

Following the report, SMCI shares ended the day with a modest gain, but within five days, the stock was trading 40% above its closing price on 6 May. This sharp rise was driven by a forecast from investment firm Raymond James Financial, which suggested that SMCI’s share price could reach 41 USD.

The company appears to be gradually recovering from a difficult period in recent years, though it remains exposed due to its heavy dependence on advances in artificial intelligence.

This article analyses Super Micro Computer, Inc., outlines its revenue sources, reviews its Q2 2025 financial performance, and presents expectations for the 2025 calendar year. Additionally, it includes a technical analysis of SMCI, forming the basis for the Super Micro Computer stock price forecast for 2025.

About Super Micro Computer, Inc.

Super Micro Computer was founded in 1993 by Charles Liang. The company designs and manufactures server hardware, including motherboards, servers, data storage solutions, GPU systems, and other computing technologies. With proprietary manufacturing facilities in the Netherlands, the US, and Taiwan, it can tailor its products to the specific demands of different markets.

Super Micro employs a modular approach to deliver customised solutions for data centres, cloud services, and enterprise clients. The company went public on 29 March 2007, listing on the NASDAQ under the ticker SMCI.

Super Micro Computer, Inc.’s primary revenue streams

Super Micro Computer generates revenue from the following sources:

• Server systems – the largest revenue segment, which includes:
• Rackmount servers – high-performance servers designed for data centres, cloud computing, and AI workloads
• GPU-optimised systems – servers built for artificial intelligence (AI), machine learning, and deep learning applications
• Blade and multi-module servers – high-density solutions for enterprises and hyperscale environments

• Data storage systems – this segment includes all-flash and hybrid storage solutions, as well as software-defined storage (SDS) architectures
• Embedded and IoT systems – encompasses revenue from industrial and edge computing products, including IoT and edge servers used in smart cities, automation, and real-time data processing. It also includes industrial computing solutions for healthcare, telecommunications, and manufacturing
• Networking and power technologies – this segment comprises:

• High-performance networking equipment – Ethernet switches, network adapters, and interconnects for data centres
• Power supply units (PSUs) and cooling systems – modular, energy-efficient, and redundant power supplies, along with air and liquid cooling solutions

• Components and accessories – revenue from individual hardware components, such as motherboards, chassis, processors, memory, storage devices, and accelerators

Super Micro’s business model is centred on modular and customisable computing systems catering to enterprises, cloud providers, and the artificial intelligence industry.

Threat of delisting for Super Micro Computer, Inc. on NASDAQ

Super Micro Computer faced serious issues related to accounting practices and corporate governance, which led to the threat of its delisting from the NASDAQ exchange. Between 2014 and 2017, the company committed violations in revenue and expense reporting, prompting an investigation by the U.S. Securities and Exchange Commission (SEC). In 2020, the SEC determined that the company and its former Chief Financial Officer had engaged in accounting violations, resulting in a settlement where Super Micro agreed to pay a fine of 17.50 million USD.

In 2018, Super Micro was temporarily removed from the NASDAQ listing due to delays in submitting its financial reports. The company failed to publish up-to-date financial data for nearly two years, causing concern among investors and regulators.

In 2024, the company was once again embroiled in controversy following a report by Hindenburg Research. The report alleged that Super Micro was involved in questionable accounting practices and was linked to suppliers controlled by relatives of its CEO. These accusations raised new doubts about the transparency of the company’s financial reporting.

An additional blow came when Super Micro decided to delay filing its annual report for the 2024 fiscal year, leading to a warning from NASDAQ about the possibility of delisting. The situation worsened in October 2024 when the auditing firm Ernst & Young declined to continue working with Super Micro, citing issues with internal controls, corporate governance, and potential violations of accounting practices. The auditor’s departure further exacerbated investor suspicions, contributing to a decline in the company’s stock price.

In response to the crisis, Super Micro’s Board of Directors established a special independent committee to investigate the allegations made by Ernst & Young and Hindenburg Research. In December 2024, the committee concluded its investigation, stating that there was no evidence of fraud or misconduct by the company’s management. Following this, NASDAQ granted Super Micro an extension until February 2025 to address its violations and submit all required reports.

Super Micro successfully avoided delisting by submitting a compliance restoration plan and appointing BDO USA as its new auditor. NASDAQ granted the company an extension until 25 February 2025 to submit the 10-K and 10-Q reports for the quarters ending 30 September and 31 December 2024. The company submitted all the required documents by the 25 February deadline, restoring its compliance with NASDAQ’s requirements and maintaining its listing. As a result, the delisting did not occur, but the episode highlighted serious issues with the company’s internal processes and eroded investor confidence.

Super Micro Computer, Inc. Q2 2025 financial report

On 25 February, amid the threat of delisting, Super Micro Computer released its Q2 2025 financial report for the quarter ending 31 December 2024. Below are the key figures:

• Revenue: 5.68 billion USD (+54%)
• Net profit: 320.59 million USD (+8%)
• Earnings per share: 0.51 USD (no change)
• Gross profit: 670.02 million USD (+18%)

Charles Liang, Chair and CEO of Super Micro, described Q2 FY2025 as relatively strong despite challenges, highlighting a 54% year-on-year revenue increase. This growth was driven by robust demand for AI solutions from both existing and new customers. He acknowledged certain obstacles, including cash flow pressures and market concerns regarding the delayed financial report. Liang identified the transition from Nvidia Hopper to Blackwell GPUs as a key growth factor, with supply expected to increase in the current quarter (Q3 FY2025).

CFO David Weigand provided further details, noting that gross margin stood at approximately 11.9%, down from 13.1% in Q1 FY2025, due to changes in product mix and customer base. He emphasised that AI-related platforms accounted for over 70% of revenue, reinforcing the company’s strong position in the enterprise and cloud provider markets.

For Q3 FY2025, ending 31 March 2025, the company projected revenue in the range of 5.00-6.00 billion USD, signalling continued growth, although at a more moderate pace due to competitive dynamics in the AI server market.

Charles Liang has set an ambitious target of 40.00 billion USD in revenue by early FY2026, citing underutilised production capacity in Malaysia, the US, and Taiwan. He underscored Super Micro’s leadership in direct liquid cooling (DLC) technology, forecasting that over 30% of new data centres globally will adopt this technology within 12 months, positioning SMCI as a key player in this transition. Liang also highlighted plans to expand manufacturing operations in Europe, the US, and Taiwan to meet growing demand, particularly for AI infrastructure solutions.

Super Micro Computer, Inc. Q3 2025 financial year report

• Revenue: 4.60 billion USD (+19%)
• Net profit: 108.77 million USD (-73%)
• Earnings per share: 0.31 USD (-53%)
• Gross profit: 440.21 million USD (-27%)
• Gross margin: 9.6% (-590 bps)

Super Micro recorded revenue of 4.6 billion USD, slightly above the revised forecast but still below Wall Street expectations, which had been buoyed by the AI euphoria earlier this year. Adjusted earnings per share stood at 0.31 USD, also lower than in the previous quarters, indicating that the phase of hypergrowth has begun to slow, at least temporarily. Management attributed the shortfall to delays in customer orders and uncertainty in the supply chain.

A major strength remains the long-term driver of the widespread adoption of AI infrastructure. Super Micro sits at the heart of this trend, producing high-density server systems with liquid cooling that hyperscaler clients actively purchase. A recent partnership with DataVolt demonstrates that the company is expanding its presence in the Middle East region, where a data centre boom is underway.

Financially, the company appears stable, holding approximately 1.4 billion USD in cash on its balance sheet, although debt is also significant – around 1.9 billion USD – and is increasing. Moreover, much of the revenue growth in recent quarters has come from a very narrow segment: AI servers. Should this market cool off (for example, due to saturation or increased competition from Dell, HPE, and NVIDIA), it would put pressure on margins.

The company’s guidance for Q4 2025 anticipates revenue between 5.6 and 6.4 billion USD and earnings per share in the range of 0.40 to 0.50 USD. However, the full-year revenue forecast has been lowered to 21.8-22.6 billion USD from the previous estimate of 23.5-25.0 billion USD, citing delayed customer spending and economic uncertainty.

Super Micro remains one of the key players in AI infrastructure and is likely to benefit in the long term from continued industry growth. However, with heavy dependence on a single segment, the shares carry a risk of correction if demand slows or competition intensifies. SMCI stock should be approached as a high-risk asset with growth potential but also a high likelihood of volatility and drawdowns.

Expert forecasts for Super Micro Computer, Inc. stock

• Barchart: four of 15 analysts rated Super Micro Computer stock as a Strong Buy, three as a Moderate Buy, six as Hold, and two as Strong Sell. The highest target price is 100 USD, while the lowest target price is 15 USD
• MarketBeat: six of 19 experts assigned a Buy rating, 11 recommended Hold, and two advised Sell. The highest target price is 93 USD, and the lowest is 30 USD
• TipRanks: of 12 surveyed analysts, six rated the stock Buy, five recommended Hold, and one advised Sell. The highest target price is 70 USD, with the lowest at 24 USD
• Stock Analysis: of 18 experts, four rated the stock as Strong Buy, two as Buy, eleven as Hold, and one as Sell. The highest target price is 130 USD, and the lowest is 30 USD

Super Micro Computer, Inc. stock price forecast for 2025

Since reaching its peak in March 2024, Super Micro Computer shares have lost 67% of their value, with the decline reaching as much as 86% at one point. Few companies have managed to avoid bankruptcy or acquisition after such a significant fall in share price. As of June 2025, the stock continues to trade within a downward channel. In February, its price bounced off the trendline, which currently acts as resistance. Based on this price behaviour, potential scenarios for SMCI share movements in 2025 are as follows:

The base-case scenario for Super Micro Computer shares is a test of support at 37 USD, followed by a rebound and a rise in price towards the 66-76 USD range. This forecast is supported by the company’s long-term partnership with DataVolt and the ongoing development of AI, which is expected to boost demand for Super Micro Computer’s products.

The negative scenario for Super Micro Computer stock assumes a break below the 37 USD support level, which could see the share price fall to 18 USD.

Risks of investing in Super Micro Computer, Inc. stock

Investing in Super Micro Computer stock carries several factors that could negatively impact the company’s revenue and profits, ultimately affecting investor returns:

• Accounting issues: SMCI has a history of delays in financial reporting, including restatements and a fine of 17.50 million US dollars imposed by the SEC in 2020 for serious accounting violations
• Dependence on major clients: a significant portion of SMCI’s revenue comes from a few key customers. Recent financial reports indicate that one of its largest clients accounted for approximately 22% of total revenue. Such high dependency poses risks, especially if these clients significantly reduce their order volumes
• Increasing competition: the AI server market is becoming increasingly competitive. Companies like Dell Technologies (NYSE: DELL) and Wistron Corp. are actively developing similar solutions, which could lead to a decline in SMCI’s market share and put pressure on its profit margins
• Financial difficulties and cash flow constraints: despite revenue growth, SMCI has historically reported negative free cash flow. Working capital requirements have increased, and the company’s reliance on debt has grown, indicating potential financial challenges ahead
• Stock sales by executives: recent large-scale stock sales by SMCI’s CEO and CFO have raised investor concerns about the company’s future prospects