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Super Micro Computer (SMCI, Financials) is under pressure after Mizuho Securities cut its stock price target to $34 from $50, citing weak preliminary results and delayed customer ramps.
Super Micro forecasts Q3 revenue of approximately $4.55 billion and EPS of $0.30well below the consensus of $5.35 billion and $0.53, respectively.
Previous company guidance had anticipated $5.50 billion in revenue and $0.54 EPS.
Gross margin declined 220 basis points quarter-over-quarter to 9.6%, missing the 12.0% consensus due to increased inventory reserves and accelerated shipping expenses.
Full-year fiscal 2025 guidance has been cut by 7% for revenue and 14% for EPS. For fiscal 2026, projections were lowered 4% and 17%, respectively.
The company cited delays in customer ramp-ups across Tier 2, Enterprise, and GB200 segments, with activity now expected to pick up in the June quarter.
Despite the cut, analysts acknowledged Super Micro's continued role as a key player in the AI server space.
However, growing competition from Dell Technologies (DELL, Financials)which holds an Outperform rating with a $140 targetadds pressure.
The combination of weaker guidance and intensified competition may cap near-term upside.
Super Micro is set to report full Q3 results and hold its earnings call on May 6, which could provide more clarity on order strength and recovery timelines.
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This article first appeared on GuruFocus.