Is Super Micro Computer Stock a Buy, Sell, or Hold for July 2025?
Despite this growth narrative, SMCI stock faces a fair degree of skepticism due to concerns around slim margins, heavy reliance on a few major customers, and increased competition. As July begins and investors size up Super Micro's sharp climb against rising risks, is SMCI a wise portfolio addition? Or is the stock better left alone?
Is Palantir Stock a Buy, Sell, or Hold for July 2025?
Microsoft Stock Is Headed for $4 Trillion. Is It Too Late to Buy MSFT Here?
Is Plug Power Stock a Buy, Sell, or Hold for July 2025?
Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines.
Super Micro Computer is a leading provider of high-performance and energy-efficient server and storage solutions, headquartered in San Jose, California. With a global presence and manufacturing operations in the U.S., Taiwan, and the Netherlands, the company holds a strong position in the rapidly growing AI hardware market. Its market capitalization currently stands at $29.3 billion.
SMCI stock may be trading at half its 52-week high of $96.33, but it has been anything but quiet in 2025. The stock has climbed 55% year-to-date (YTD), riding the AI hardware wave and strong revenue projections along with deepening ties to Nvidia's Blackwell. Technically, the RSI near 64 (as of June 26th) shows rising strength, nearing overbought territory. That's a signal that bulls are firmly in charge for now.
In terms of valuation, SMCI stock is priced at 27.7 times forward adjusted earnings and 1.9 times sales, trading at a discount compared to sector peers.
Super Micro Computer reported its third-quarter results for fiscal 2025 (ended March 31, 2025) on May 6, presenting an overall mixed story. Net sales increased 19.5% year-over-year (YOY) to $4.6 billion, slightly above the consensus estimate and reflecting continued demand for AI-driven server and storage systems. However, the top line declined sequentially due to customers delaying key platform decisions amid economic uncertainty and tariff concerns.
Margins came under considerable pressure, with non-GAAP gross margin easing to 9.6% from 15.5%. Although Super Micro is profitable, the company's non-GAAP EPS declined 53% YOY to $0.31 but came in higher than consensus estimates.
Despite these near-term challenges, management highlighted its sustained confidence in the company's AI positioning and growth trajectory. CEO Charles Liang emphasized that many delayed orders are expected to close in the June and September quarters.
Facing softer results, the company trimmed its fiscal 2025 revenue outlook. Management expects the top line to be between $21.8 billion and $22.6 billion, down from the prior guidance of a $23.5 billion to $25 billion range, signaling caution on near-term execution. Still, with Q4 guidance of between $5.6 billion and $6.4 billion in revenue and non-GAAP EPS between $0.40 and $0.50, management hinted at a rebound ahead.
Analysts monitoring Super Micro project EPS to decline by 14% to around $1.72 for fiscal 2025, before rising by 27% to $2.18 for fiscal 2026.
KeyBanc analyst Brandon Nispel initiated coverage on Super Micro with a 'Sector Weight' rating, signaling a wait-and-watch stance. Despite Super Micro's solid revenue growth, the analyst expects a sharp deceleration by the end of fiscal Q4. The concern is that Super Micro operates in what KeyBanc calls 'one of the most competitive businesses in the IT Hardware space,' which is pressuring gross margins.
Profitability is slipping, and while growth remains solid, the lack of consistent free cash flow raises red flags. For KeyBanc, that's the true test of long-term value. In a market driven by AI demand and server wars, Super Micro's next chapter may be about defending its turf, not just growing it.
Wall Street still sees promise in Super Micro, having a "Moderate Buy" rating overall. Out of 15 analysts covering the tech stock, four recommend a 'Strong Buy,' three give a 'Moderate Buy,' six remain cautious with 'Hold' ratings, and two have 'Strong Sell' ratings.
The average analyst price target for SMCI stock is $41.21, indicating potential downside of 12.7%. However, the Street-high price target of $70 suggests that the stock could rally as much as 48%.
On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
14 minutes ago
- Yahoo
Xerox Holdings (NASDAQ:XRX) shareholders have endured a 47% loss from investing in the stock five years ago
It is a pleasure to report that the Xerox Holdings Corporation (NASDAQ:XRX) is up 43% in the last quarter. But over the last half decade, the stock has not performed well. After all, the share price is down 61% in that time, significantly under-performing the market. Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Given that Xerox Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit. In the last five years Xerox Holdings saw its revenue shrink by 4.2% per year. That's not what investors generally want to see. The share price decline of 10% compound, over five years, is understandable given the company is losing money, and revenue is moving in the wrong direction. We don't think anyone is rushing to buy this stock. Ultimately, it may be worth watching - should revenue pick up, the share price might follow. The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image). It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for Xerox Holdings in this interactive graph of future profit estimates. It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Xerox Holdings, it has a TSR of -47% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return. Xerox Holdings shareholders are down 47% for the year (even including dividends), but the market itself is up 16%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Xerox Holdings better, we need to consider many other factors. Take risks, for example - Xerox Holdings has 2 warning signs (and 1 which is concerning) we think you should know about. Xerox Holdings is not the only stock that insiders are buying. For those who like to find lesser know companies this free list of growing companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Verge
17 minutes ago
- The Verge
Laid-off workers should use AI to manage their emotions, says Xbox exec
The sweeping layoffs announced by Microsoft this week have been especially hard on its gaming studios, but one Xbox executive has a solution to 'help reduce the emotional and cognitive load that comes with job loss': seek advice from AI chatbots. In a now-deleted LinkedIn post captured by Aftermath, Xbox Game Studios' Matt Turnbull said that he would be 'remiss in not trying to offer the best advice I can under the circumstances.' The circumstances here being a slew of game cancellations, services being shuttered, studio closures, and job cuts across key Xbox divisions as Microsoft lays off as many as 9,100 employees across the company. Turnbull acknowledged that people have some 'strong feelings' about AI tools like ChatGPT and Copilot, but suggested that anybody who's feeling 'overwhelmed' could use them to get advice about creating resumes, career planning, and applying for new roles. 'These are really challenging times, and if you're navigating a layoff or even quietly preparing for one, you're not alone and you don't have to go it alone,' Turnbull said. 'No Al tool is a replacement for your voice or your lived experience. But at a time when mental energy is scarce, these tools can help get you unstuck faster, calmer, and with more clarity.' Microsoft has loudly embraced AI, having announced plans in January to invest $80 billion into AI infrastructure prior to this latest wave of job cuts. That environment might have made Turnbull think his recommendations were reasonable. More broadly, however, generative AI is viewed by some creatives as a threat to creative industries like gaming, which has already struggled with growing layoffs and studio closures over the last few years. It's unclear why Turnbull deleted his LinkedIn post, but if the comments on this repost made to Bluesky are any indication, creatives probably didn't take too kindly to his suggestions. You can read the full text of the deleted post below: 'These are really challenging times, and if you're navigating a layoff or even quietly preparing for one, you're not alone and you don't have to go it alone. I know these types of tools engender strong feelings in people, but I'd be remiss in not trying to offer the best advice I can under the circumstances. I've been experimenting with ways to use LLM Al tools (like ChatGPT or Copilot) to help reduce the emotional and cognitive load that comes with job loss. Here are some prompt ideas and use cases that might help if you're feeling overwhelmed: Career Planning Prompts: 'Act as a career coach. I've been laid off from a [role] in the game industry. Help me build a 30-day plan to regroup, research new roles, and start applying without burning out.' 'What kinds of game industry jobs could I pivot to with experience in [Production/Narrative/LiveOps/etc.]?' Resume & Linkedin Help 'Here's my current resume. Give me three tailored versions: one for AAA, one for platform/publishing roles, and one for startup/small studio leadership.' 'Rewrite this resume bullet to highlight impact and metrics.' 'Draft a new LinkedIn 'About Me' section that focuses on my leadership style, shipped titles, and vision for game development.' Networking & Outreach 'Draft a friendly message I can send to old coworkers letting them know I'm exploring new opportunities.' 'Write a warm intro message for reaching out to someone at [studio name] about a job posting.' Emotional Clarity & Confidence 'I'm struggling with imposter syndrome after being laid off. Can you help me reframe this experience in a way that reminds me what I'm good at?' No Al tool is a replacement for your voice or your lived experience. But at a time when mental energy is scarce, these tools can help get you unstuck faster, calmer, and with more clarity. If this helps, feel free to share with others in your network. Stay kind, stay smart, stay connected.'
Forbes
17 minutes ago
- Forbes
Bitcoin, Bankruptcy, And The Big Beautiful Bill
NEW YORK - SEPTEMBER 15: A trader works on the floor of the New York Stock Exchange September 15, ... More 2008 (Photo by) Getty Images With the passage of the One Big Beautiful Bill, Washington's balance sheet is now the largest in the republic's history. Roughly $40 trillion of federal obligations are owed against a $29.9 trillion economy, which means the debt-to-GDP ratio may rise far above the 124 percent recorded in December 2024. The figure is enormous but not unprecedented in historical terms. It is important that we look to history to understand our current moment, rather than either reflexively panicking or 'trusting the plan.' The United States breached the hundred-percent threshold once before in 1946 when wartime issuance pushed public debt to 119 percent of GDP. Britain emerged from the Napoleonic era at more than 250 percent. Both nations eventually worked their burdens down because institutional credibility remained intact and, crucially, because early-industrial technologies radically improved economic output. However, that path is not preordained. Japan has hovered near 250 percent for decades while seeing stagnant real wages. When the Western Roman Empire disintegrated in the fifth century, it did so with almost no funded debt. Its fatal constraint was the tax base. Economic historians have chronicled the centuries-long losing battle fought by Roman emperors to stabilize and expand the sources of tax revenue that kept the state solvent. Among many methods deployed, the most common was to debase the circulating coins and inflate the money supply. This merely accelerated widespread refusal of Roman money, and currency failures left the state unable to pay armies or maintain infrastructure. The United States economy is vastly different from ancient Rome's, with one important exception: there remains today the same temptation to finance public promises with money created out of thin air. Whereas Rome lacked a bond market and so clipped coins out of desperation, Washington enjoys the deepest markets in the world and still issues new dollars to pay off politically connected elites. That institutional advantage will last only as long as global confidence endures. Confidence decays when the marginal unit of debt fails to buy a commensurate increase in productive capacity. Foreign creditors will continue to finance U.S. deficits only so long as Treasury securities remain the least ugly 'safe-haven' asset. Today, techno-optimists (which includes this writer) note that the next productivity wave may blow away anything we could currently anticipate. AI, robotics, and abundant power from advanced fission and early-stage fusion could lift total-factor productivity as much as the internet did, or even many times more. Yet, relying on growth alone duplicates Rome's error in reverse because it presumes away hard political constraints. President Trump may be banking on growth as a solution to our debt spiral, but even a sustained, unprecedented productivity boom denominated in dollars leaves Congress and cantillionaires free to siphon off as much of this new wealth as they can. And make no mistake, they will do their very best. The Cantillon Effect refers to the disproportionate gains captured by those closest to new money creation. It thrives today in the venture carry trade and the revolving door between K Street and Wall Street. So long as that dynamic endures, political actors will arbitrage growth for personal gain irrespective of aggregate prosperity, ensuring that nominal advancements leak out through privileged channels. In a system of entrenched fiscal dominance, GDP can rise while living standards fail to keep pace because the unit of account is melting. The deeper problem than the debt itself is an incentive structure where control of the money printer is the ultimate political prize. Bitcoin And The Escape From The Debt Spiral Bitcoin offers a way out because it removes the money printer from the political calculus. The supply of bitcoin is perfectly stable and enforced by a distributed network whose participants have no authority to change it. The supply of money thus becomes an external, physical reality, as opposed to a policy lever. This alters the behavior of consumers, investors, and politicians. Savers can plan on real returns that survive the electoral cycle. Investors can price risk and returns more accurately, making capital markets much more efficient. And governments must fund programs (and wars) transparently through taxes or genuine borrowing. Bitcoin confronts the Cantillon dynamic head-on. Increases in the supply of bitcoin are algorithmically scheduled and transparent. Powerful people cannot lobby for preferential dilution. Any attempt to raise the supply of bitcoin as defined in its protocol would splinter the network via a contentious hard fork – an economic suicide pact that no rational faction accepts. This makes bitcoin exceedingly stable. It is a monetary Schelling-point that even gold cannot occupy. History shows that even when sovereign currencies are tied to gold, governments readily suspend convertibility when politically convenient. Critics protest that a fixed supply is inherently deflationary and thus incompatible with growth. However, that argument conflates demand-collapse deflation with productivity-driven cost declines. In a high-innovation environment, a currency that appreciates modestly in real terms can harmonize economic incentives. Savers need not chase speculative yield, entrepreneurs still finance projects via equity, and wages adjust upward in purchasing power rather than just nominally. If the United States does benefit from an AI and energy-fueled productivity renaissance, bitcoin's rules-based monetary layer would prevent the dividend from being financialized into ever larger deficits. Empires collapse when their monetary systems, which should be a reflection of the development and movement of real resources, no longer correlate to reality. They thrive when they manage to convert technology into productive capacity without distorting the market with seigniorage and self-dealing. The coming decade presents the United States with a trilemma. Our options are to chase growth and tolerate inflation siphoning away most of the progress, impose austerity and trigger a populist backlash, or adopt a neutral monetary protocol and accept the discipline it implies. Growth alone is a necessary but insufficient precondition to a new golden age, and bitcoin supplies the missing ingredient. A thermodynamic protocol for digital money combined with dramatic AI and energy breakthroughs could pull us out of our debt spiral and allow technological progress to unlock an unprecedented increase in quality of life.
