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Why Super Micro Computer Stock Popped Today
Key Points
Super Micro Computer beat on earnings but missed on sales last night.
The server-maker forecast strong sales growth in fiscal 2027 -- but made no promises on free cash flow.
Super Micro Computer (NASDAQ: SMCI) stock surged 13.2% through 11:11 a.m. ET on Wednesday despite reporting mixed results in its fiscal Q4 2026 earnings report last night.
Expected to earn just $0.71 per share on sales of $11.7 billion for the quarter, Super Micro reported a powerful $1.70 per share profit. Sales, however, came up short at only $11.1 billion.
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Super Micro Computer Q4 earnings
But maybe investors should forgive that miss? After all, Super Micro may not have hit the exact number Wall Street analysts forecast for it. The company did still grow its sales 91% year over year, however -- which is not too shabby.
Gross profit margin on those sales nearly doubled, too, to 17.5%, and on the bottom line, Super Micro booked a net profit per share of $1.62 when calculated under generally accepted accounting principles (GAAP). (The "$1.70" per share number was non-GAAP.)
Best of all, Super Micro generated $722 million in positive free cash flow in the quarter. The company still ended up burning $6.65 billion in cash for the year, but at least Super Micro ended fiscal 2026 on a high note.
What this means for Super Micro stock
The question now is whether Super Micro can keep its cash pile growing -- or will revert to burning cash in fiscal 2027.
CEO Charles Liang says demand for Super Micro's AI servers is still growing, and sales for fiscal Q1 2027 should range from $14.5 billion to $15.5 billion, with GAAP profits per share between $0.89 and $0.98. He didn't give free cash flow guidance, however, and analysts polled by S&P Global Market Intelligence continue to forecast cash burn for 2027.
If and when that changes, I'll take a closer look at Super Micro stock.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.