To The Moon

$SUPER MICRO COMPUTER INC(SMCI)$

Super Micro has just released its latest quarterly figures, and the after-hours market reaction has been quite dramatic. At the time of article, the stock is up around 8% to 9%. However, earlier in after-hours trading, the stock had dropped by as much as 15%—possibly even lower—before rebounding. That’s a massive swing within just a few hours.

Let’s dive into the good and the bad from this earnings report. Also, if you're wondering whether their 10-K filing has been submitted—no, it has not.

Earning Overview

This isn’t a finalized earnings report, but the company has provided preliminary figures. For the current quarter, net sales came in at approximately $5.6 to $5.7 billion, reflecting a 54% year-over-year growth at the midpoint. However, there were multiple misses in the report, including on revenue and guidance. Earnings were weak, with misses across revenue, margins, and guidance—but the $40B fiscal 2026 forecast completely changed the sentiment. Now, the biggest question is whether SMCI files its reports on time by February 25. If they do, the stock could skyrocket given the valuation disconnect.

Despite the company highlighting its direct liquid cooling technology—expected to be adopted in over 30% of new data centers in the next 12 months—these lower-than-expected forecasts have led to increased stock volatility.

Additionally, the company announced a private placement of convertible notes and is still working to file its 10-K report by mid-year, which will likely influence investor sentiment.

The stock remains highly volatile, bouncing between gains and losses. While Supermicro has been a high-flying stock due to strong AI-driven data center demand, concerns over financial transparency and increasing competition continue to weigh on investor confidence. Many remain cautious until the company gets its financial filings in order.

Margins and Earnings:

• GAAP and non-GAAP gross margins declined to a range of 11.8% to 11.9%.

• GAAP diluted net income per share is expected to be $0.50 to $0.52, which is flat year-over-year and a miss.

• Non-GAAP earnings also missed expectations.

Despite these challenges, there was one major win, which likely explains the strong after-hours rally.

Management Commentary

Super Micro highlighted its direct liquid cooling technology, expecting over 30% of new data centers to adopt it within the next 12 months. Management believes this positions the company well for AI infrastructure growth, particularly with Nvidia Blackwell and other upcoming technologies. They also emphasized expansion beyond the U.S., specifically into Asian and European markets.

Fiscal Year Guidance

While Fiscal 2025 revenue guidance was revised downward—from a range of $26B to $30B to a new range of $23.5B to $25B—the big surprise came in their Fiscal 2026 forecast.

• Management expects Fiscal 2026 revenue to be around $40 billion—a massive year-over-year increase.

• CEO Charles Liang repeatedly emphasized that this is a conservative estimate.

• Given that Super Micro's market cap is still under $30 billion, this forecast suggests a major disconnect between current valuation and expected growth.

Key Risks: Delisting Concerns

However, there’s still a major risk looming: if Super Micro fails to file its 10-K and 10-Q by February 25, 2025, the company will face delisting.

During the earnings call, management reiterated that they are actively working on the filings. They also announced a private placement of $700 million in 2.25% convertible senior notes due in 2028.

Looking Ahead

For Q3 2025, Super Micro provided the following guidance:

• Net sales: $5 billion to $6 billion

• GAAP EPS: $0.36 to $0.53

• Non-GAAP EPS: $0.46 to $0.62

While some areas remain uncertain, demand for Nvidia Blackwell, liquid cooling solutions, and AI-related infrastructure continues to grow. Super Micro claims it holds a competitive edge in these areas, though margins have yet to show improvement.

Super Micro has amended the terms of its existing convertible senior notes due 2029. Yes, this move is dilutive, but the key word here is "convertible"—meaning the notes can be converted into shares, but they don’t have to be.

DOJ & SEC Investigations

Regarding the Department of Justice (DOJ) and SEC investigations, in late 2024, the company received subpoenas from both agencies requesting certain documents. This followed allegations made in a short-seller report published in August 2024. Super Micro is fully cooperating with these document requests.

Additionally, due to delays in filing periodic reports, the company faces several securities litigation complaints and derivative lawsuits. However, management believes these complaints are without merit. While not great news, it is something to be aware of.

Unaudited Preliminary Fiscal 2024 Results

Super Micro has confirmed that no previously issued financial statements require restatement. However, as the company works toward completing its audit, it has made some adjustments to its unaudited fourth-quarter fiscal 2024 results, initially announced on August 6, 2024:

• Net sales increased by approximately $46 million.

• Cost of sales increased by approximately $96 million, which includes a $45 million inventory reserve charge.

• Operating expenses rose by around $5 million.

Until the company formally files its fiscal 2024 financial statements, it will need to continuously reassess accounting estimates for financial reporting.

The Big Picture: A High-Stakes Bet Until February 25

The situation with Super Micro is clear: until February 25, 2025, investors are essentially betting on whether the company will file its overdue reports on time. If it does, delisting will be avoided, and the stock is likely to rally significantly.

From a valuation perspective, if the company avoids delisting, the potential upside is huge. Given its current market cap (under $30 billion) and its projected $40 billion revenue for fiscal 2026, the stock could double based on a simple price-to-sales multiple expansion.

Stock Movement & Technical Levels

Currently, Super Micro’s stock is trending toward its 200-day moving average. It came close in December, but the 200-day moving average is now lower, making it easier to break above. If it does, the stock could gain more momentum.

Another factor to watch is the upcoming CPI report on Wednesday, which could impact the overall market. If the market reacts negatively, SMCI could be affected as well, along with other growth stocks.

Key Takeaways

• Quarterly results were weak, with misses across the board.

• The major upside surprise was the $40 billion revenue guidance for fiscal 2026—$10 billion higher than analysts’ current expectations (~$30 billion).

• February 25th is the key date—if filings are submitted on time, the stock will likely soar.

• Investing now is a gamble—some will take the risk, others will wait and watch.

Market Sentiment

After-Hours Stock Movement: Initially down 15%, rebounded +9% on guidance surprise. Key Risk: 10-K & 10-Q filings still delayed—deadline February 25, 2025, or risk delisting. Stock currently trending toward its 200-day moving average—watch technical levels.

Short-Term Sentiment: Cautiously Bullish—Traders are watching for filing updates and market reaction to CPI data.

Medium/Long-Term Sentiment: Bullish if filings are submitted on time—If no delisting occurs, AI growth tailwinds + valuation gap = potential major upside.

Conclusion

Personally, I’m not jumping in just yet, but I’m watching closely. The company reiterated that everything is moving as planned regarding Nvidia Blackwell, GB200, and B200, so no surprises there.

That’s all for now. The main reason the stock is up? That massive fiscal 2026 guidance surprise.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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