The Zhitong Finance App learned that the preliminary quarterly results announced in advance by the artificial intelligence (AI) server manufacturer Ultra Micro Computer (SMCI.US) greatly exceeded Wall Street expectations, which shows that the current AI infrastructure investment boom is still driving rapid growth in server demand.
According to a statement released by Ultramicrocomputer, the company's quarterly revenue forecast for September 30 is between 18.5 billion and 19.5 billion US dollars, which is significantly higher than analysts' average expectations of 15 billion US dollars. Based on the median value of US$19 billion in the guidance range, the estimated revenue is about 26.7% higher than market expectations.
Meanwhile, the company expects gross margin of between 12% and 12.5% for the quarter. Although Ultramicrocomputer has yet to release full quarterly financial data, initial revenue performance already reflects strong demand in the AI server market.
Wall Street analysts see this data as a “clear positive sign” and expect the company's stock price to rise as a result of this pre-disclosure.
According to Ultramicrocomputer, the company attributed revenue exceeding expectations to strong demand for AI platforms, while at the same time attributing gross margin exceeding expectations to favorable customers and product portfolios. In response, J.P. Morgan Chase pointed out that the revenue exceeded expectations to some extent, as the pricing environment and data center investment plans of major customers provided clues, but the gross margin exceeding expectations was an even greater surprise: the level of 12.0% to 12.5% was higher than the 10.6% forecast by J.P. Morgan Chase and the 10.4% expected by the market. Both revenue and gross margin mean that F1Q27 earnings per share will be significantly higher than J.P. Morgan Chase and the market's agreed expectations of $1.05.
However, J.P. Morgan warned that F1Q27's gross margin was still significantly lower than F4Q26's 17.6%; F4Q26 benefited from several contract delays, lower tariff costs and inventory reserves, while F1Q27's gross margin was higher than 9.5% in the same period last year, and management said the underlying business portfolio was better than originally anticipated. Investors' focus remains on the specific drivers of gross margins exceeding expectations and whether this level of profit margins is sustainable. Currently, J.P. Morgan maintains a “neutral” rating for ultra-microcomputers.
Ultramicrocomputers have yet to update the FY27 guidelines. Previously, the total revenue of the guidelines was 65 billion to 72 billion US dollars. The company also stated at the last quarterly results meeting that the F4Q26 cash conversion cycle is 149 days and is expected to improve, but if revenue exceeds 80 billion US dollars, it may be necessary to seek external financing. The company is expected to hold a results conference call after the market on November 3.
At the industry chain level, Goldman Sachs believes that strong demand for ultra-microcomputer AI platforms is a positive reading for Dell (DELL.US), and sees that Dell's F2027 (12 months ending January 2027) $74 billion AI server sales target has room to rise. J.P. Morgan also believes that the results are a positive reading for peers such as Dell and HPE (HPE.US).
In a research report, Wedbush also mentioned the positive impact of this data on Nvidia (NVDA.US) and the storage and hard disk drive (HDD) sector. Wedbush analyst Matt Bryson said that the revenue of ultra-microcomputers was about 4 billion US dollars higher than the previous guidance, and the gross margin was also higher than the guideline range. Overall, it was a “clear positive sign.”
However, Goldman Sachs continues to maintain a “sell” rating for ultra-microcomputers, with a target price of $34, while Wedbush gave it a “neutral” rating, with a target price of $40.