Super Micro Computer Q3 2025 earnings preview: Nvidia partnership to drive AI growth

When will Super Micro Computer report?

Super Micro Computer (SMCI) is scheduled to report its third quarter (Q3) earnings for 2025 on Tuesday, 29 April 2025, after the market closes.

Company backdrop

SMCI is a key player in artificial intelligence (AI) and data centre infrastructure, leveraging its Nvidia partnership and liquid-cooling expertise to drive growth.

SMCI faced scrutiny following a 2024 short-seller report alleging accounting issues, leading to the resignation of its auditor (Ernst & Young) and subpoenas from the Department of Justice (DOJ) and Securities and Exchange Commission (SEC).

The company appointed BDO as its new auditor and filed its delayed fiscal year (FY) 2024 10-K and first quarter/second quarter (Q1/Q2) FY2025 10-Q reports by 25 February 2025, avoiding delisting from the US Tech 100 (Nasdaq).

Key financials

Q3 2025 expectations

• Earnings per share (EPS): $0.54
• Revenue: $5.49 billion

Comparison to Q2 results

SMCI announced preliminary financial results for Q2 2025 (ended 31 December 2024), reflecting strong revenue growth but mixed performance relative to expectations, alongside ongoing accounting challenges.

• Revenue: $5.67 billion, representing 54% year-over-year (YoY) growth. However, this fell short of the company’s prior guidance of $5.5 billion – $6.1 billion and analyst expectations of $5.89 billion, according to London Stock Exchange Group (LSEG) consensus
• EPS: $0.60, reflecting 7.87% YoY growth, above the analyst consensus expectation of $0.54 but below the company’s prior guidance of $0.56 – $0.65.

SMCI revenue chart

Key drivers

AI revenue and Nvidia partnership

SMCI’s growth is heavily tied to AI infrastructure demand, particularly through its partnership with Nvidia for graphics processing unit (GPU)-based servers (such as Hopper and Blackwell platforms). In Q2, Chief Executive Officer (CEO) Charles Liang emphasised the strong demand for Blackwell GPUs, though supply constraints limited revenue.

Gross margin trends and cost management

SMCI’s gross margins have declined significantly, from 16.7% in Q1 2024 to 11.9% in Q2 2025, due to competitive pricing, liquid-cooling component costs, and customer mix shifts.

Impact of tariffs on supply chain and costs

The 2025 tariffs pose risks to SMCI’s supply chain, particularly for server components and Nvidia GPUs sourced from Asia.

What to watch for

• Updates on Blackwell GPU integration and revenue contribution, as Charles Liang, CEO of SMCI, noted, “capacity is ready, but not enough new chips”
• Evidence of sustained or expanded Nvidia allocations
• Growth in AI server market share, especially as competitors like Dell and Hewlett Packard (HP) vie for dominance
• Signs of margin recovery, potentially through optimised pricing or reduced reliance on high-cost components
• Management’s guidance on cost control, especially for liquid-cooling solutions, which are critical for AI data centres but costly
• Impact of tariffs on component costs, as 2025 tariffs could further pressure margins
• Margin improvement or stable guidance could signal operational efficiency and boost investor confidence
• Commentary on tariff-related cost increases, especially for data centre hardware, which could raise input costs by 5 - 25%
• Progress on supply chain diversification, such as expanded manufacturing in Malaysia and Taiwan, where a new facility aims to double server rack production to 10,000 units/month
• Any delays in data centre deployments, as seen with Microsoft's Ohio project pause due to tariff uncertainties
• Clear strategies to mitigate tariff impacts, such as localised production, could alleviate concerns about profitability

TipRanks Smart Score

SMCI has a TipRanks Smart Score of ’6 Neutral’ and is rated as a ‘Hold’ by analysts with 4 ’Buy’, 4 ‘Hold’ and 2 ‘Sell’ recommendations - as of 23 April 2025.

SMCI TipRanks Smart Score chart

Guidance and long-term growth outlook

• Q3 guidance for Q4 2025 and any reaffirmation of FY2025 targets, especially the potential to reach $40 billion by FY2026
• Commentary on liquid-cooling adoption, expected in over 30% of new data centres within 12 months, and its impact on revenue
• Demand signals for AI infrastructure, as global research and advisory firm Gartner predicts a 15.5% increase in data centre spending to $367 billion in 2025
• Upbeat guidance or evidence of overcoming chip shortages

SMCI technical analysis

SMCI’s share price fell 85% from its March 2024 peak of $122.90 to a low of $17.25 on 11 November. In February of this year, it spiked to a high of $66.44 before falling back to support between $27.50 and $25.50, which is near where it is currently trading.

Providing SMCI holds above the $27.50 - $25.50 support region, there is potential for a rebound back into the mid $40s. A sustained break of the $27.50 - $25.50 support region would indicate that a retest of the $17.25 low is imminent.

SMCI daily chart

• _{Source: TradingView. The figures stated are as of 23 April 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}