Super Micro Computer (SMCI) is set to announce its first quarter earnings on Tuesday, November 4th, after the market close.
Wall Street expects the San Jose, Calif.-based company to post EPS of $0.39.
Analysts expect SMCI to trade lower as the company, in its Q1 preliminary sales result, reported revenue of $5 billion compared to the consensus of $6.48 billion.
In its preliminary report, the company stated that recent design win upgrades pushed some expected Q1 revenues to Q2.
The company, which provides IT Solution for AI, Cloud, Storage, and 5G/Edge, reported recent design wins of over $12 billion and reiterated its full-year 26 revenue guidance of $33 billion.
Goldman Sachs rated SMCI as Sell with a price target of $30, implying a downside of nearly 42%.
“While SMCI’s market share among some of the largest GPU-specialized cloud service providers to date has been impressive & demand among AI CSPs remains robust, we view the AI server market as increasingly competitive as the product becomes more commoditized, ultimately pressuring profitability,” highlighted Goldman Sachs analyst Michael Ng.
Michael Ng added that SMCI’s opportunity to address enterprise AI infrastructure demand in the medium term will also be competitive.
Wall Street analysts and Seeking Alpha’s Quant are cautious and consider it a Hold, while Seeking Alpha analysts are bullish and rated SMCI a Buy.
Seeking Alpha analyst Deep Value Investing rated the stock as a cautious Buy, saying that the company is approaching a significant growth cycle starting in FQ2 as it reported $12 billion in new FQ2 design wins and reiterated its FY26 revenue outlook of $33 billion, despite missing FQ1 revenue consensus.
Over the last two years, SMCI has beaten EPS estimates 75% of the time and has beaten revenue estimates 63% of the time.
Over the last three months, EPS estimates have not seen any upward revisions versus 14 downward moves, while revenue estimates have seen one upward revision against 10 downward estimates.
Shares in the company have jumped over 71% since the start of the year, outperforming the broader S&P Index, which has gained around 16% during the same period.