Editor’s Note: The story has been refreshed with the latest market price action and a revised headline.
Super Micro Computer Inc. (NASDAQ:SMCI) is riding a record AI server backlog into fiscal 2027, but rapid GPU platform transitions could create inventory risks if customer deployments or configurations change unexpectedly.
How Super Micro Will Face GPU Inventory Risk
On Tuesday, during the company’s fiscal fourth-quarter earnings call, Bank of America analyst Ruplu Bhattacharya asked how Super Micro is managing inventory as GPU platforms evolve rapidly and whether its record backlog could leave the company holding excess inventory.
CFO David Weigand acknowledged the risk, saying companies across the industry have to remain alert to technology changes.
"What we found was with prices rising so fast, a lot of times now, some of the old inventory does get resold favorably. Nonetheless, as you point out, you don’t want to get caught having to hold that inventory," Weigand said.
He explained that Super Micro tries to secure noncancelable purchase orders while aligning component procurement as closely as possible with customer shipment schedules.
Modular Design Could Limit AI Server Risk
CEO Charles Liang offered another layer of protection, pointing to Super Micro’s modular, "building block" approach to server design.
He said many of the company’s subsystems are compatible with or optimized for multiple product lines and even different product generations.
That flexibility means Super Micro may be able to redirect components to other server configurations rather than being stuck with inventory tied to an outdated GPU platform.
Super Micro’s $60 Billion+ Orders Drive Record Backlog
Super Micro reported $11.12 billion in fiscal fourth-quarter revenue, while adjusted earnings reached $1.70 per share, well above Wall Street expectations.
The company also entered fiscal 2027 with more than $60 billion in new orders and a record backlog.
Looking ahead to the first quarter of fiscal 2027, Super Micro expects revenue between $14.5 billion and $15.5 billion, with GAAP diluted EPS of $0.89 to $0.98 and non-GAAP diluted EPS of $1.01 to $1.10.
Based on its anticipated customer and product mix, the company expects gross margin of 10.4% to 10.8%.
Price Action: Super Micro shares closed at $31.60 on Tuesday, up 0.45% and rose 9% to $34.47 in premarket trading, according to Benzinga Pro.
Benzinga Edge Rankings put SMCI in the 90th percentile for Quality, while the stock shows a negative long-term price trend but a positive trend over the short and medium term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: JHVEPhoto / Shutterstock
Login to comment