Gross profit doubles, far exceeds previous guidance! Super Micro Computer surges nearly 20% after earnings report

Super Micro Computer released its preliminary financial results for the fourth quarter on Tuesday (July 21), with gross margin expectations far surpassing prior guidance. A record-high volume of new orders further boosted market confidence, sending the stock soaring by more than 20% in after-hours trading.

Preliminary results show that for the fourth quarter ending June 30, 2026, the company's GAAP and non-GAAP gross margin are expected to range between 15% and 17%, almost double the previously guided range of 8.2% to 8.4%. Management attributed this outperformance to a "favorable customer mix and product portfolio." Meanwhile, the company secured over $60 billion in new orders for the quarter, marking a historic record and locking in a substantial delivery pipeline for the future.

This positive news prompted the market to rapidly reprice. Super Micro Computer's shares surged as much as 21% in after-hours trading. This marks a significant turnaround in investor sentiment—prior to this, the stock had nearly halved from its early June highs. The company's full fourth quarter and fiscal 2026 results will be officially released after the US market closes on August 11.

Gross Margin Unexpectedly Doubles, Reshaping the Earnings Narrative

Gross margin performance was the core indicator most closely watched by the market in this preliminary report. Super Micro Computer's previous guidance for fourth quarter gross margin was only 8.2% to 8.4%, while the latest estimate of 15% to 17% means actual performance will significantly exceed expectations, almost doubling.

This improvement was not achieved overnight. The company's gross margin hit a low of 6.3% in the second quarter of fiscal 2026, with CEO Charles Liang attributing this to changes in customer structure, tariff pressures, and shortages of key components such as memory. Gross margin edged up to 9.9% in the third quarter, and the jump in the fourth quarter suggests that the company's pricing power in the AI server solutions segment is strengthening.

During the most recent earnings call in May, Liang stated that the company is committed to achieving a sustainable double-digit gross margin target by prioritizing enterprise market expansion and Data Center Building Block Solutions. The preliminary results now show that this goal has been met ahead of schedule.

Record $60 Billion in Orders, Strong Demand Outlook

Aside from gross margin, the record order volume is another major focal point for the market. Super Micro Computer disclosed that new orders in the fourth quarter exceeded $60 billion, setting a new historical record and will be delivered over the coming quarters.

This figure directly reflects the robust demand for Super Micro Computer's modular data center solutions and further attests to the ongoing investment boom in AI infrastructure. The company is seeking to transform itself from a server designer and manufacturer to a full-stack data center solutions provider, with the large backlog of orders providing strong support for this strategic shift.

Notably, the company also expects fourth quarter revenue to be near the low end of the guidance range of $11 billion to $12.5 billion. However, the market response was muted—investors appear to value the restoration of profit margins and strong forward-looking demand metrics over the absolute size of short-term revenue.

The after-hours surge also represents a phase of emotional recovery for Super Micro Computer after a series of negative events.

In early June, the company announced plans to raise $7 billion through an equity offering to support surging AI server orders, sparking concerns about equity dilution and overspending. This led to a sharp decline in stock price, with a cumulative drop of nearly 50% from the June 9 high to date. The unexpected leap in gross margin and record orders now offer substantial catalysts for the previously suppressed share price to rebound.