Super Micro Computer earnings preview: Q1 2025 expectations
Super Micro Computer reports Q1 earnings on February 3, 2025. Here's what analysts expect and the key factors that could impact results.
Key numbers to watch
Super Micro Computer Inc (SMCI) is scheduled to report its fiscal first quarter (Q1) 2025 earnings within the next few days.
Analysts anticipate a non-GAAP earnings per share (EPS) of $0.75, representing a more than doubling increase from $0.34 in the same quarter last year.
Projected revenue stands at approximately $6.126 billion, which would mark an impressive near tripling growth year-over-year (YoY) when compared to $2.120 billion in Q1 2023.
These expectations come amid growing demand for artificial intelligence (AI) infrastructure and data centre solutions.
Focus on AI developments
Investors will closely monitor SMCI's performance in the AI sector, particularly its strategic partnership with NVIDIA.
The company's ability to capitalise on AI-driven demand could significantly impact its future growth trajectory. This includes both hardware sales and integration services.
Market participants will look for commentary on customer adoption rates and any new partnerships or initiatives in the AI space.
The sustainability of AI-related revenue growth will be a crucial factor in assessing the company's long-term prospects.
Financial reporting concerns
The upcoming earnings report represents an opportunity for SMCI to address concerns about its financial reporting practices.
Previous challenges with timely disclosures have led to 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 analysis
Recent pressures on gross margins due to competitive pricing and liquid-cooling component costs have impacted profitability.
Investors will 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 influence market sentiment.
Super Micro Computer analyst and TipRanks Smart Score ratings
According to LSEG Data & Analytics, analysts rate the SMCI share as a ‘hold’ with 3 ‘buy’, 7 ‘hold’ and 2 ‘sell’ (as of 30/01/2025).
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 30/01/2025).
Technical outlook of the Super Micro Computer share price
The SMCI share price has been sliding since its $122.90 March 2024 peak with it 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.
Super Micro Computer Inc weekly candlestick chart
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. It consists of the early August 2024 low, October and December 2024 highs.
How to trade Super Micro Computer Inc earnings
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Remember that earnings releases can cause significant market volatility, particularly given SMCI's stock price history and recent challenges. Consider using risk management tools when trading around major market events.
This information has been prepared by IG, a trading name of IG Markets Limited. 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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