Super Micro Computer’s (SMCI) stock came under pressure after releasing disappointing preliminary results for its fiscal third quarter, prompting several analysts to slash their price targets. The weaker-than-expected update has shaken investor confidence, raising concerns about growth momentum and valuation as the AI hardware leader navigates a competitive landscape. Notably, SMCI stock fell over 19% in pre-market trading on Wednesday.
Super Micro’s Q3 Numbers Raise Concerns
For context, the company now expects adjusted earnings between $0.29–$0.31 per share and revenue between $4.5–$4.6 billion, well below Wall Street’s estimates of $0.54 per share and $5.4 billion in revenue.
According to Main Street Data, Super Micro posted a total revenue of $5.7 billion in the quarter ending December 31, 2024. This marks a sharp projected slowdown in the current quarter, signaling potential demand pressures or operational challenges. It also raises concerns about the company’s growth momentum, especially as expectations fall short of previous performance and analyst forecasts.
Analysts Cut Price Targets on SMCI Stock
Following the preliminary results, Mizuho Securities has downgraded its outlook for Super Micro Computer. Mizuho cuts the company’s revenue and earnings estimates for fiscal 2025 by about 7% and 14%, respectively, and trimmed their projections for fiscal 2026 by roughly 4% and 17%. Meanwhile, four-star-rated analyst Vijay Prakash at Mizuho Securities reduced his price target on SMCI stock from $50 to $34, while maintaining his Hold rating.
Likewise, J.P. Morgan lowered its price target for SMCI stock to $36 from $39. It explained that the revenue miss isn’t due to weaker industry demand or supply chain disruptions. Rather, it seems tied to particular customer choices that have impacted the timing of platform deployments.
Analysts at J.P. Morgan further noted that the recent developments undermine Super Micro’s credibility in providing reliable guidance. As a result, investors are likely to scrutinize future revenue and margin forecasts more closely, particularly those projecting aggressive growth.
Is SMCI a Good Stock to Buy?
On TipRanks, SMCI stock has a Hold consensus rating based on four Buys, five Holds, and two Sell ratings. Meanwhile, the average Super Micro Computer price target of $45.80 implies a 27.2% upside potential from current levels.
