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HPC Server and DLC Traction Likely to Boost SMCI's Q4 Earnings
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Key Takeaways
{\"0\":\"SMCI\'s Server and Storage Systems segment is fueled by hyperscaler, AI, and HPC demand.\",\"1\":\"Early availability of NVIDIA Blackwell and strong DLC adoption boosted data center traction.\",\"2\":\"Margins remain pressured by customer mix, pricing, and costs tied to DLC AI GPU clusters.\"}
Super Micro Computer (SMCI - Free Report) is set to report its fourth-quarter fiscal 2025 results on Aug. 5. Investor attention is firmly focused on the company’s server and storage business, which is driven by robust traction from hyperscalers, high-performance computing and artificial intelligence (AI) customers.
SMCI is also experiencing rapid adoption of its direct liquid cooling (DLC) offerings, data center building block solutions and powerful servers based on NVIDIA, AMD and Intel chips.
Click here to know how Super Micro Computer’s overall fiscal fourth-quarter results are likely to be.
High Demand for Servers and Storage to Propel SMCI’s Sales
SMCI’s Server and Storage Systems segment is driving the company’s financial strength. Growing demand for graphics processing unit (GPU)-optimized servers tailored for AI workloads has been at the core of SMCI’s success. Super Micro Computer’s integration of Intel Gaudi, NVIDIA Blackwell Chips and AMD processors in its servers is likely to bring in more customers in high performance computing, AI and hyperscale space.
Another key factor supporting the segment’s momentum is Super Micro Computer’s early availability of systems built on NVIDIA’s new Blackwell GPU architecture, alongside continued strength in Hopper-based systems. The expansion of the company’s Datacenter Building Block Solutions, which offers customers a one-stop integrated solution for servers, storage, networking and cooling, is expected to have further boosted adoption among enterprises and hyperscalers during the to-be-reported quarter.
SMCI has also been capitalizing on strong customer interest in both air-cooled and DLC rack-scale platforms, which are essential for the next wave of AI data center expansion. Leadership in DLC technology has also been a powerful competitive advantage for Super Micro Computer. As AI training models become more resource-intensive, data centers are increasingly adopting DLC solutions to meet energy efficiency and density requirements. This trend is likely to have boosted the Server and Storage Systems segment’s revenues in the fourth quarter.
However, as many customers chose to wait for newer AI platforms, such as NVIDIA’s Blackwell, before placing orders, this might have hurt the company’s order book in the to be reported quarter. SMCI’s perpetual contraction of margin due to a variety of reasons like unfavorable product and customer mix, competitive pricing to acquire more customers, cost rise due to DLC AI GPU cluster deployments and higher upfront costs associated with ramping up production for its DLC technology is a matter of concern for the investors in the fourth quarter.
While margins are expected to have remained under pressure due to customer mix and ramping investments in next-generation platforms, the strong top-line growth in the Server and Storage Systems business is anticipated to have helped partially offset earnings headwinds.
Alkami Technology shares have lost 34.5% year to date. The Zacks Consensus Estimate for Alkami Technology’s full-year 2025 earnings is pegged at 15 cents per share, up by 2 cents over the past 30 days, implying growth of 51.7% from the year-ago quarter’s reported figure.
Arista Networks shares have lost 11.9% year to date. The Zacks Consensus Estimate for ANET’s full-year fiscal 2025 earnings is pegged at 65 cents per share, up by a penny in the past 30 days, indicating year-over-year growth of 13.66%.
Amphenol shares have gained 45.1% year to date. The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $2.69 per share in the past seven days, indicating year-over-year growth of 42.33%.
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HPC Server and DLC Traction Likely to Boost SMCI's Q4 Earnings
Key Takeaways
Super Micro Computer (SMCI - Free Report) is set to report its fourth-quarter fiscal 2025 results on Aug. 5. Investor attention is firmly focused on the company’s server and storage business, which is driven by robust traction from hyperscalers, high-performance computing and artificial intelligence (AI) customers.
SMCI is also experiencing rapid adoption of its direct liquid cooling (DLC) offerings, data center building block solutions and powerful servers based on NVIDIA, AMD and Intel chips.
Click here to know how Super Micro Computer’s overall fiscal fourth-quarter results are likely to be.
High Demand for Servers and Storage to Propel SMCI’s Sales
SMCI’s Server and Storage Systems segment is driving the company’s financial strength. Growing demand for graphics processing unit (GPU)-optimized servers tailored for AI workloads has been at the core of SMCI’s success. Super Micro Computer’s integration of Intel Gaudi, NVIDIA Blackwell Chips and AMD processors in its servers is likely to bring in more customers in high performance computing, AI and hyperscale space.
Super Micro Computer, Inc. Price and EPS Surprise
Super Micro Computer, Inc. price-eps-surprise | Super Micro Computer, Inc. Quote
Another key factor supporting the segment’s momentum is Super Micro Computer’s early availability of systems built on NVIDIA’s new Blackwell GPU architecture, alongside continued strength in Hopper-based systems. The expansion of the company’s Datacenter Building Block Solutions, which offers customers a one-stop integrated solution for servers, storage, networking and cooling, is expected to have further boosted adoption among enterprises and hyperscalers during the to-be-reported quarter.
SMCI has also been capitalizing on strong customer interest in both air-cooled and DLC rack-scale platforms, which are essential for the next wave of AI data center expansion. Leadership in DLC technology has also been a powerful competitive advantage for Super Micro Computer. As AI training models become more resource-intensive, data centers are increasingly adopting DLC solutions to meet energy efficiency and density requirements. This trend is likely to have boosted the Server and Storage Systems segment’s revenues in the fourth quarter.
However, as many customers chose to wait for newer AI platforms, such as NVIDIA’s Blackwell, before placing orders, this might have hurt the company’s order book in the to be reported quarter. SMCI’s perpetual contraction of margin due to a variety of reasons like unfavorable product and customer mix, competitive pricing to acquire more customers, cost rise due to DLC AI GPU cluster deployments and higher upfront costs associated with ramping up production for its DLC technology is a matter of concern for the investors in the fourth quarter.
While margins are expected to have remained under pressure due to customer mix and ramping investments in next-generation platforms, the strong top-line growth in the Server and Storage Systems business is anticipated to have helped partially offset earnings headwinds.
Zacks Rank & Stocks to Consider
SMCI currently has a Zacks Rank #5 (Strong Sell).
Alkami Technology (ALKT - Free Report) , Arista Networks (ANET - Free Report) and Amphenol (APH - Free Report) are some top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. ANET, ALKT and APH sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alkami Technology shares have lost 34.5% year to date. The Zacks Consensus Estimate for Alkami Technology’s full-year 2025 earnings is pegged at 15 cents per share, up by 2 cents over the past 30 days, implying growth of 51.7% from the year-ago quarter’s reported figure.
Arista Networks shares have lost 11.9% year to date. The Zacks Consensus Estimate for ANET’s full-year fiscal 2025 earnings is pegged at 65 cents per share, up by a penny in the past 30 days, indicating year-over-year growth of 13.66%.
Amphenol shares have gained 45.1% year to date. The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $2.69 per share in the past seven days, indicating year-over-year growth of 42.33%.