Super Micro lifts margin forecast as AI orders hit $60 billion
Super Micro more than doubled its gross margin forecast after securing over $60 billion in new orders for AI servers, signaling that high-end hardware demand remains robust enough to lift industry profitability.
Super Micro raised its projected gross and adjusted gross margin to a range of 15% to 17%, a sharp increase from the 8.2% to 8.4% range it issued in May. The upgrade, detailed in a preliminary business update on Tuesday, sent the server maker's shares surging and lifted competitors in after-hours trading.
The company explicitly tied the profitability improvement to its sales composition. "The revision is primarily due to a favorable customer and product mix," Super Micro said. This mix includes high-performance servers containing Nvidia graphics processing units designed to train and run artificial intelligence models.
Demand for these AI-optimized systems is translating into an unprecedented pipeline. Super Micro booked over $60 billion in new orders during the fiscal fourth quarter, pushing its total backlog to a record level by the end of the quarter on June 30. "These new orders are expected to be delivered over future quarters," the company stated, highlighting a lengthy revenue realization cycle.
The sheer scale of the order intake contrasts with the company's near-term top-line performance. Super Micro now anticipates fourth-quarter revenue will land at the low end of its $11.0 billion to $12.5 billion target. That implies a figure slightly below the $11.67 billion consensus estimate from analysts polled by LSEG, suggesting supply chain or production constraints are currently limiting quarterly shipments despite massive demand.
The preliminary results carry significant weight for the broader enterprise hardware sector, which is scrambling to capture AI infrastructure spending. Investors interpreted Super Micro's margin guidance as evidence that the industry can avoid a race to the bottom on pricing even as production scales. Dell climbed 5% and Hewlett Packard Enterprise gained 4% in extended trading on Tuesday.
Clues to Super Micro's improving product mix emerged last month. In June, CEO Charles Liang wrote on X that he was "proud to co-build another new Gigawatt AI datacenter for @SpaceX and @XAI within a year." Elon Musk's SpaceX also controls the X social network.
The company is scheduled to hold its earnings call on Aug. 11, where management will likely face questions about its ability to convert the record backlog into recognized revenue without sacrificing the newly achieved margin gains.
