The Super Micro Computer logo appears on the smartphone screen.
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Super micro computer Shares fell 14% on Wednesday after the server company raised its top guidance but reported third-quarter revenue that slightly beat estimates.
The company on Tuesday reported revenue of $3.85 billion, below the $3.95 billion expected by analysts surveyed by LSEG. Adjusted earnings of $6.65 per share beat the $5.78 EPS that analysts had expected.
Super Micro raised its fiscal 2024 revenue forecast to between $14.7 billion and $15.1 billion, exceeding the $14.6 billion expected, according to LSEG.
In 2023, the stock rose by 246% amid investor hopes in Super Micro, which competes with companies including… Dale And Hewlett-Packard Companycould be a primary server vendor Nvidiawhose GPUs run powerful AI models.
Super Micro joined the S&P 500 in March. Its shares are still up 156% this year.
Bank of America analysts reiterated their buy rating on Super Micro while lowering their price target from $1,280 to $1,090, writing in a note to investors on Wednesday that their “bullish thesis remains sound,” citing the company's positive guidance and its ability to attract demand from other chip makers outside of… Its scope. Nvidia, among other factors.
“Super Micro remains a net seller of AI servers and we expect positive estimate revisions to continue over the long term,” the analysts wrote.
Analysts at JPMorgan, who rated the stock as Overweight with a $1,150 price target, praised the outlook for Super Micro's business, writing that it “left little to worry about” about demand and supply gains. However, they discussed concerns about the company's willingness to sacrifice on margins and its need for more capital raises that could eat into earnings.
“We continue to be favorably surprised by the strong revenue momentum and continued demand momentum in the industry, as Super Micro's ramp reinforces its strong market leadership position,” the analysts wrote in a note on Tuesday.
Also on Tuesday, Wells Fargo analysts, who maintained an equal weight rating on Super Micro stock, lowered their price target from $960 to $890. Analysts at Barclays maintained a Neutral rating and raised their price target from $961 to $1,000.
“SMCI maintains a strong competitive moat based on our supply chain examinations,” Barclays analysts wrote.
— CNBC's Michael Bloom contributed to this report.
