Super Micro Computer NASDAQ:SMCI shares jumped about 25% on Wednesday after the AI server maker raised its fiscal fourth-quarter gross margin outlook and disclosed more than $60 billion in AI server orders during the quarter, while Goldman Sachs said the update pointed to improving profitability despite softer revenue expectations.
Super Micro said fiscal fourth-quarter revenue is expected near the lower end of its prior $11 billion to $12.5 billion guidance range. The company now projects gross margins of 15% to 17%, up from its previous forecast of 8.2% to 8.4%, suggesting earnings may benefit from a richer product mix and shipment timing.
Goldman Sachs said the stronger margin outlook appeared to reflect the delay of a lower-margin transaction that had been expected to close during the quarter. The brokerage said the timing shift weighed on revenue but could help explain the higher profitability outlook without materially changing Super Micro's longer-term business prospects.
Goldman Sachs also cited Super Micro's disclosure of more than $60 billion in AI server orders as evidence of continued customer demand and broader enterprise adoption. Despite the improved outlook, the firm maintained its Sell rating. Super Micro is scheduled to report full fiscal fourth-quarter results on Aug. 11.