SMCI stock price analysis as focus shifts to Supermicro earnings

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The Super Micro Computer (NASDAQ: SMCI) stock price has wavered recently as investors assess its performance and wait for the next financial results. It was trading at $900 on Wednesday, 35% above its lowest point in May and 26% below the highest point this year.

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Benefiting from AI wave


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Super Micro Computer, also known as Supermicro, has become one of the biggest beneficiaries of the ongoing artificial intelligence wave. 

This trend is best seen in the company’s financial performance. It had over $3.5 billion in annual revenue in 2019 and over $5.19 billion in the last financial year. Its net profit in the two periods was $71 million and $285 million. 

The most recent quarterly results showed that its revenue stood at $3.85 billion while its net profit soared to $450 million. In other words,the company made more money in a quarter than it did in the four quarters of 2019.

Super Micro Computer has benefited as demand for its high-tech solutions has jumped. Its servers and storage solutions have become an essential part of the tech industry. In particular, its Nvidia solutions like GPU servers and rackmount servers have become an important part of the tech industry.

Supermicro expects that its business will continue doing well this year. In the last quarterly release, the company said that its Q4’24 revenue will be between $5.1 billion and $5.5 billion. For the year, it expects that its results will be between $14.7 billion and $15.1 billion. 

Analysts believe that Super Micro’s guidance was relatively low. The average estimate is that its revenue will be $5.2 billion, helped by the strong demand. Historically, SMCI has been known for being a bit conservative in its results. 

SMCI earnings ahead


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The next few weeks will be important for the Super Micro Computer’s stock price as it is expected to publish its results. The earnings calendar estimates that it will deliver its results on 8th August. 

However, analysts expect that it will preannounce these results as it has done in the past. In a note, a Wells Fargo analyst noted that the company could publish its results as soon as next week. He said:

“Super Micro has either preannounced or published its earnings release on average on day 19 post quarter close – i.e., leaving us focused on a possible update late-next week”

These results will be important because they will provide more information about its performance. Besides, the company is said to be working on cluster deployments for companies like xAI, Meta Platforms, and Tesla. 

They will also give investors a chance to assess whether the company is overvalued or not. The company has a forward PE multiple of 40, higher than the sector median of 29. Its forward EV to EBYDA multiple stands at 3.50, higher than the industry’s median of 14.

A strong quarterly results and forward guidance will help to justify the company’s valuation in the near term. The stock will likely drop if it records slow growth and forecast.

Super Micro Computer stock price analysis


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SMCI chart by TradingView

The daily chart shows that the SMCI share price peaked at $1,228 earlier this year as its bullish momentum accelerated. It has now lost momentum and was trading at $900, where it has been stuck at in the past few weeks. 

The stock has formed an ascending channel pattern and it remains slightly above the 50-day and 100-day Exponential Moving Averages (EMA). It has also moved slightly above the lower side of the pitchfork tool.

Therefore, the stock’s outlook is neutral with a bullish bias ahead of its earnings. If this happens, the next point to watch will be at $1,000. The alternative scenario is where the stock drops to the support at $800.


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