Super Micro raises gross margin guidance to 17% as AI server demand surges

Super Micro Computer guided Q4 gross margins to 15%-17%, nearly double its prior forecast, as AI server demand pushed backlog to a record $60 billion.

"The significant improvement in gross margins reflects a favorable customer and product mix," the San Jose, California-based company said in a preliminary business update on July 21.

Revenue for the quarter ended June 30 is expected near the low end of the $11 billion to $12.5 billion range the company previously forecast. The new gross margin guidance of 15% to 17% compares with the prior outlook of 8.2% to 8.4%. New orders during the quarter exceeded $60 billion, pushing total backlog to record levels, with deliveries expected over future quarters.

Shares surged more than 20% in after-hours trading following the announcement. The margin expansion shows Supermicro is benefiting from a shift toward higher-value AI server configurations, even as overall revenue growth moderates. The company will report full fourth-quarter and full-year fiscal 2026 results on Aug. 11.

The preliminary results mark a sharp reversal from the margin compression that had weighed on Supermicro shares earlier this year. The company had previously warned that a shift toward lower-margin custom server configurations would pressure profitability, but the latest guidance points to a more favorable mix of higher-value systems.

The $60 billion in new orders — the largest quarterly intake in the company's history — underscores sustained demand from hyperscale cloud providers and enterprise customers building out AI infrastructure. Supermicro's Data Center Building Block Solutions platform allows customers to configure servers with varying combinations of processors, graphics processing units, and cooling systems, including liquid cooling.

The company faces ongoing scrutiny over export-control compliance. The board is conducting an independent review of certain transactions related to alleged export-control issues, which could affect prior period results, the company said in its forward-looking statement.

The guidance raise suggests Supermicro's profitability is improving faster than expected as it delivers more complex AI systems. Investors will watch the Aug. 11 earnings call for details on segment margins and whether the $60 billion order backlog signals sustained demand through fiscal 2027.

This article is for informational purposes only and does not constitute investment advice.