Super Micro Computer (SMCI) stock extended its decline, falling about 8% in pre-market trading today after the artificial intelligence (AI) server maker reported disappointing results for the first quarter of Fiscal 2026. Following the Q1 earnings report, Top Mizuho analyst Vijay Rakesh cut his price target on Super Micro from $50 to $45 and kept a Neutral rating. He said rising costs could weigh on near-term profits, even as AI server demand remains strong.
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Rakesh is a five-star analyst on TipRanks, ranking #35 out of 10,109 analysts tracked. He has a 66% success rate and an impressive average return per rating of 30.50%.
Why Mizuho Analyst Remains Cautious on SMCI Stock
Rakesh said Super Micro’s September-quarter revenue of $5.02 billion was in line with the company’s update but below Wall Street’s forecast of $6.09 billion. However, guidance for the December quarter was much stronger, with revenue expected to climb 109% quarter-over-quarter to $10.5 billion, beating the $8.06 billion estimate.
He pointed to solid AI server demand, with $12 billion in new design wins and a $13 billion order pipeline under the Blackwell Ultra program. The company also raised its Fiscal 2026 sales goal to at least $36 billion, up from its earlier target of over $33 billion.
Still, Rakesh said profit margins remain a concern. Gross margin fell about 350 basis points from the prior quarter due to higher engineering, labor, and delivery costs tied to large AI projects.
Looking ahead, he said Super Micro’s Data Center Building Block Systems (DCBBS) could help lift margins above 20% over time. However, with rising competition from peers like Dell (DELL) and ongoing cost pressures, Rakesh expects limited upside in the near term.
Is SMCI Stock a Strong Buy?
Currently, Wall Street has a Hold consensus rating on Super Micro Computer stock based on seven Holds, four Buys, and three Sell recommendations. The average SMCI stock price target of $45.33 indicates about 4.37% downside risk from current levels.
