Super Micro Computer Q1 earnings preview
Explore the technical outlook for Super Micro Computer's share price as it approaches key support levels amid a long-term downtrend. Discover potential resistance areas and market implications.
When is Super Micro Computer reporting?
Super Micro Computer Inc (SMCI) is set to report its fiscal first quarter (Q1) 2025 earnings on Tuesday, 4 February after the market opens.
The trading signals indicate increased activity ahead of the results, with investors focused on AI infrastructure and data centre solutions.
Q1 2025 earnings expectations
- Revenue: $6.126 billion
- Revenue growth: near tripling year-over-year (YoY) from $2.120 billion in Q1 2023
- Earnings per share (EPS): $0.75, more than doubling from $0.34 YoY
These projections reflect strong demand for Super Micro Computer's AI-driven solutions. The company's strategic partnership with NVIDIA and its focus on AI developments are key factors driving growth. Super Micro Computer's ability to capitalise on AI-driven demand and maintain its growth trajectory will be crucial metrics for investors to monitor.
Investor focus: margin recovery or compression?
- Earnings report
The upcoming earnings report presents an opportunity for SMCI to address concerns regarding its financial reporting practices. Previous challenges with timely disclosures have raised worries about potential Nasdaq 100 delisting, making this report particularly significant for investor confidence. The company needs to demonstrate improved financial controls and transparency to reassure stakeholders about its governance practices. Clear communication about steps taken to enhance financial reporting processes will be essential.
- Margin pressures and profitability
Recent pressures on gross margins due to competitive pricing and liquid-cooling component costs have impacted profitability. Investors will closely scrutinise any signs of margin recovery or further compression in the quarterly results. The company's ability to maintain pricing power while managing costs will be critical for future profitability. Management's guidance on margin trends and cost control measures will significantly influence market sentiment.
Share price targets
According to LSEG Data & Analytics, analysts rate the SMCI share as a ‘hold’ with 3 ‘buy’, 7 ‘hold’, and 2 ‘sell’ ratings (as of 30 January 2025).
SMCI analyst ratings
SMCI has a TipRanks Smart Score of ‘6 Neutral’ and is rated as a ‘hold’ by analysts, with 1 ‘buy’, 4 ‘hold’, and 2 ‘sell’ recommendations (as of 30 January 2025).
TipRanks smart score rating
Super Micro Computer technical analysis
The SMCI share price has been sliding since its peak of $122.90 in March 2024, with it now approaching its 200-week simple moving average (SMA) at $24.74. Year-to-date, the company’s share price has already fallen by close to 9% in under a month.
While the SMCI share price remains below its July 2024 to January 2025 downtrend line at $33.09 and, more importantly, its early January $38.50 high, the long-term downtrend is entrenched. A possible downside target may be the August-to-October 2023 lows and potential support zone at $23.51 to $22.66.
A rise above the January 2025 high at $38.50 could lead to a retest of the $48.00 to $50.61 resistance area, which consists of the early August 2024 low, and the October and December 2024 highs.
Super Micro Computer Inc weekly chart
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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