Barclays Trims Super Micro (SMCI) Target Despite Strong AI Server Demand

Super Micro Computer, Inc. (NASDAQ:SMCI) is one of the 10 AI Stocks to Keep on Your Radar. On February 4, Barclays analyst Tim Long lowered the price target on Super Micro Computer (NASDAQ: SMCI) to $38.00 (from $43.00) while maintaining an “Equal Weight” rating.

Discussing SMCI’s earnings report, Barclays noted how December quarter results exceeded expectations on both revenue and earnings. SMCI posted revenue of $12.7 billion, which represents a 153% quarter-over-quarter increase and also exceeds Barclays’ estimate by more than $2 billion.

However, gross margin came in at 6.4%, which is slightly below the analyst firm’s 6.5% estimate. The management forecast’ fiscal third-quarter revenue to be at least $12.3 billion and lifted its full-year 2026 revenue guidance to at least $40 billion, in line with analysts’ expectations of 66% revenue growth this fiscal year.

Gross margin is anticipated to improve by 30 basis points quarter-over-quarter in the next quarter, albeit still remaining below 7%. The firm added that Data Center Building Block Solutions (DCBBS) is likely to increase in the profit mix.

According to the firm, SMCI’s fiscal 2026 guidance points to a sequential forth-quarter deceleration, but views this as conservatism. It expects momentum to sustain through the second half of the year.

Super Micro Computer, Inc. (NASDAQ:SMCI) designs and manufactures high-performance server and storage solutions for data centers, cloud computing, AI, and edge computing worldwide.

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Disclosure: None. This article is originally published at Insider Monkey.