Super Micro Finds Compliance, But Growth Slows Down

Super Micro Computer has filed its financials on time, easing fears of delisting. However, its slowing growth and low margins indicate a volatile investment. Investors may need to reconsider buying shares at this time.

Date: 08-03-2025

AI Rating: 5

Compliance Achieved: Super Micro Computer, after months of uncertainty, has satisfied the Nasdaq by filing its quarterly and annual financials on time. This compliance is critical for the company's standing, alleviating fears of delisting.

Revenue Growth and Adjusted Guidance: In the last three months of 2024, Super Micro reported $5.7 billion in sales, marking a substantial 55% increase year over year. However, this growth rate is concerning as it reflects a decreasing trend from previous periods where growth exceeded 100%. Additionally, the company has revised its fiscal 2025 sales guidance downward from $26-$30 billion to $23.5-$25 billion, representing a shift in expectations and signaling potential issues with sustaining previous performance levels.

Profit Margins: Another notable aspect is the low gross profit margins, which dipped below 12%. Low margins present a challenge for the company, especially in a competitive market where costs could rise due to tariffs and economic fluctuations. This lack of margin also creates a vulnerability to profit fluctuations in future quarters.

Investment Outlook: The combination of slowing revenue growth and low margins raises concerns about Super Micro's financial health moving forward. Investors are advised to approach with caution, as the company may not have the necessary buffer should costs unexpectedly increase. While there are still signs of profitability, the volatility indicates a higher risk investment environment.

Stocks: SMCI