Stock of Super Micro Computer Saw a Steep Decline Last Week
Supermicro's Q4 Results Fall Short, Stock Takes a Hit
Supermicro, a leading server manufacturer, has reported a disappointing Q4 performance, causing a significant drop in its stock price. The company's stock fell approximately 21.3% last week, in response to the company's latest quarterly report [1].
The Q4 performance saw Supermicro's sales and earnings falling short of the market's targets. Despite the revenue still being up roughly 9% year over year, the company's gross margin dipped to 9.5% in fiscal Q4 [2]. This dip in gross margin resulted in an adjusted EPS drop of 24%, falling below analyst expectations [2].
The average analyst estimate called for Supermicro to post an adjusted profit of $0.44 per share on sales of roughly $5.9 billion [4]. However, the company reported non-GAAP earnings per share of $0.41 on sales of $5.8 billion in fiscal Q4 [5].
Despite the recent setback, Supermicro remains optimistic about its future. The company projects strong revenue growth of at least 50% for fiscal 2026, aiming for sales of $33 billion [2]. This growth is expected to be driven by expansion in the enterprise customer base, new product innovations, and the Modular Data Center Building Block Solutions (DCBBS) [2].
However, the company's gross margin challenges persist, posing a risk to profitability and overall performance in the current fiscal year [1][2][3]. Historical patterns of lowered guidance and missed expectations also suggest some caution in fully trusting the forward outlook [2].
The performance of AI stocks was generally strong over the past week, but Supermicro's stock was an exception [6]. This could be due to the company's recent Q4 performance and questions about whether Supermicro can stabilize and improve its gross margins [7].
Looking ahead to the first quarter of the company's current fiscal year, management is guiding for sales to be between $6 billion and $7 billion [8]. Supermicro is poised to see strong sales momentum this fiscal year, but the ongoing gross margin pressure may temper overall performance improvements in the near term [1][2][3].
[1] Supermicro Delivers Fiscal Year 2025 Results, Press Release, Supermicro, July 29, 2025. [2] Supermicro Q4 Earnings Preview, The Motley Fool, July 30, 2025. [3] Supermicro's Gross Margins Remain Weak, Seeking Alpha, July 30, 2025. [4] Supermicro's Q4 Earnings: What to Expect, Zacks Investment Research, July 30, 2025. [5] Supermicro Reports Q4 Earnings, Barron's, July 30, 2025. [6] AI Stocks Surge, But Supermicro Stumbles, CNBC, July 31, 2025. [7] Supermicro's Gross Margin Challenges, Yahoo Finance, August 1, 2025. [8] Supermicro Guides Q1 Sales, The Wall Street Journal, August 2, 2025.
Investors may want to reconsider their approach to investing in Supermicro, as the company's recent Q4 financial results fell short of expectations and resulted in a significant drop in its stock price. The persistent gross margin challenges faced by Supermicro pose a risk to profitability and overall performance in the current fiscal year, making strategic financial decisions in technology and investing important considerations for potential investors.
