Supermicro lowered its Q1 revenue forecast to $5 billion due to design win upgrades shifting revenue into the next quarter. This marks a slowdown from previous quarters where revenue grew by 7.4% year-over-year. Analysts expect a 46.3% drop in EPS, reflecting margin pressure amid slower growth.

Despite the near-term challenges, Supermicro remains optimistic about demand for its Blackwell Ultra systems and announced design wins exceeding $12 billion. The company plans to prioritize higher-margin revenue streams and expand its customer base. Supermicro is confident in its full-year revenue outlook of at least $33 billion for fiscal 2026.

Supermicro is focusing on developing tailored server and storage systems for enterprise, IoT, and telecom markets to address margin concerns. The company is expanding its product lineup and manufacturing capacity, particularly for its Datacenter Building Block Solutions. Supermicro’s emphasis on cooling technologies positions it as a leading provider of high-performance computing solutions.

Competition in the AI hardware space is intense, leading to margin pressure in the near term. Wall Street maintains a “Hold” rating on SMCI stock. Despite challenges, Supermicro’s product innovation, strong demand for AI-optimized servers, and expanding customer base make it a promising investment for long-term growth potential.

Read more at Yahoo Finance: Supermicro’s Q1 Outlook Weakens. What’s Next for SMCI Stock?