Super Micro Computer (SMCI) March Quarter Revenue Affected by “Blackwell Queue” and NVIDIA’s Focus on Hyperscalers, Insights from Analyst Fireside Chat

This article does not constitute investment advice. The author currently holds no positions in any of the stocks discussed.

Super Micro Computer: Navigating Recent Challenges

Super Micro Computer (NASDAQ: SMCI), a leading provider of data center servers and innovative liquid-cooled AI racks, has faced significant challenges recently. After successfully filing its financial statements with the SEC just in time to avert a potential delisting, the company now seeks a path forward amidst fluctuating market conditions.

Financial Guidance and Future Expectations

Following a disappointing near-term outlook, Super Micro Computer has managed to counteract negative sentiment by substantially increasing its revenue projections for fiscal year 2026. The company now anticipates reaching an impressive $40 billion in full-year revenue, significantly surpassing Wall Street’s consensus estimate of $29 billion.

Insights from Northland Analyst Nehal Chokshi

In a recent analysis, Northland analyst Nehal Chokshi shed light on Super Micro Computer’s market position and future potential. Chokshi facilitated a fireside chat with SMCI’s investor relations team on February 28. This conversation came shortly after the company released its delayed financial filings on February 25, coinciding with key announcements from NVIDIA and Dell during the same week.

Key Customer Dynamics

It’s essential to highlight that NVIDIA and CoreWeave stand as Super Micro Computer’s primary customers, while Dell remains a key competitor. This competitive landscape is particularly relevant given the recent fluctuations in performance from these industry players.

Performance Metrics and Projections

In its fiscal Q2’25 report, Super Micro Computer disclosed revenue of $5.65 billion. Looking ahead to fiscal Q3’25, the company has guided for revenue in the range of $5 billion to $6 billion, indicating a potential quarter-over-quarter decline as low as 6% or an increase of up to 12%, depending on market conditions.

Challenges and Market Trends

Chokshi further elaborates that the anticipated decline in revenue is closely linked to the performance of Super Micro Computer’s GPU-as-a-Service (GPUaaS) clients. According to him, these customers are unlikely to be prioritized for NVIDIA’s upcoming Blackwell GPUs. He noted that Blackwell GPUs played a crucial role in NVIDIA’s revenue, contributing approximately 31% during the January quarter, and significantly affecting the data center revenue growth of 16% quarter-over-quarter.

The Competitive Landscape

Chokshi’s insights suggest that the revenue projections for Dell’s servers and networking remain stagnant for the impending April quarter, aligning with SMCI’s midpoint guidance. This points to the potential challenges ahead for Super Micro Computer and suggests a preferential focus by NVIDIA on hyperscale customers, which may influence the company’s near-term financial outlook.

Notably, there exists an approximate eight-week delay between NVIDIA’s recognition of GPU revenue and when server original equipment manufacturers (OEMs) report their revenue, further complicating the revenue landscape for Super Micro Computer.

In summary, the emerging insights indicate that Super Micro Computer’s immediate revenue performance is significantly impacted by NVIDIA’s production timelines and customer focus. This scenario underscores the importance of agility in strategy as the competitive landscape evolves.

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