Is Super Micro Computer (SMCI) Stock a Buy Before August 11 Earnings?

TLDR

• SMCI dropped 3.1% to $29.38 on Thursday, pulled down by broad selling in AI and semiconductor stocks
• Elon Musk’s comments that his companies would use Nvidia chips exclusively added pressure across AI hardware names
• SMCI reported a backlog of over $60 billion, with gross margin guidance raised to 15%-17%
• Q4 earnings are due August 11; Wall Street expects EPS of $0.92, up 124% year-over-year, on revenue of $11.60 billion
• Analyst consensus is “Hold” with an average price target of $38.40, implying roughly 31% upside from current levels

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Super Micro Computer stock fell 3.1% on Thursday, closing at $29.38, pulled down by a wave of selling across AI and semiconductor names.

Super Micro Computer, Inc., SMCI

The drop came after Elon Musk said his companies would use Nvidia chips exclusively. That comment sent a ripple through the broader AI hardware group, hurting stocks that compete with or sit alongside Nvidia in the data center supply chain.

Trading volume came in at around 26.4 million, down about 40% from the average daily volume of 43.6 million. The stock had closed at $30.32 the session before.

SMCI is down 37% over the past year and is essentially flat year-to-date. Its market cap sits at $17.67 billion.

The sell-off also reflects some profit-taking after a strong recent run. Investors are questioning whether the current valuation already prices in the company’s growth story.

Q4 Earnings Due August 11

All eyes are now on August 11, when SMCI reports its fiscal fourth-quarter results.

Wall Street expects EPS of $0.92, which would represent more than 124% year-over-year growth. Revenue is projected to come in at $11.60 billion, up 101% from the same period last year.

In a preliminary update last month, SMCI revealed a backlog of more than $60 billion. The company also raised its gross margin guidance to between 15% and 17%, up from a previous range of 8.2% to 8.4%.

In its most recent reported quarter, SMCI posted EPS of $0.84, beating estimates of $0.63. Revenue was $10.24 billion, up 122.7% year-over-year, though that came in below the $12.39 billion analysts had expected.

Analyst Targets and Ownership

Despite the strong backlog, most analysts remain cautious. The consensus rating is “Hold” with an average price target of $38.40, implying about 31% upside from current levels.

Mizuho cut its target from $44 to $34 with a neutral rating in late July. Rosenblatt has a $45 target and a buy rating. JPMorgan sits at $32 with a neutral call. Citigroup reaffirmed neutral with a $33 target.

Of the analysts covering SMCI, four have a Buy, twelve have a Hold, and two have a Sell.

On the ownership side, Vanguard holds the largest institutional stake at 10.28%, just ahead of CEO Charles Liang at 10.26%. Hedge funds and institutional investors collectively own 84.06% of the stock.

SMCI also held its seventh annual Open Storage Summit, featuring 38 experts from 21 technology partners including AMD, Intel, IBM, and Western Digital. The event is focused on AI inference and enterprise storage, though it is not an immediate revenue driver.

The stock’s 50-day moving average sits at $31.80, and its 200-day moving average is at $30.48.