SMCI's gross margin declined to 9.7% in Q3 FY25 due to new AI products

From Zacks Investment Research: 2025-06-30 11:10:00

Super Micro Computer Inc. (SMCI) saw a decline in gross margin to 9.7% in Q3 FY25 due to costly new AI products and higher inventory reserves. Despite a growing product portfolio and traction from hyperscalers and AI customers, SMCI’s gross margin has been inconsistent. The company is scaling global production to improve long-term efficiency. Competitors like Hewlett Packard Enterprise and Dell Technologies are also navigating challenges in the AI server space. SMCI’s stock has gained 56.1% YTD, trading at a lower price-to-sales ratio than the industry average. Estimates show a decline in fiscal 2025 earnings but growth in fiscal 2026.



Read more at Zacks Investment Research: SMCI’s Margins Contracting: Is it Still Built for Profitable Scale? – June 30, 2025