SMCI Stock Price Forecast: Q1 Revenue Guidance Raised Sharply, Jumps Over 13% Pre-Market, Can the Stock Break $40?

TradingKey - As of pre-market trading on October 21 ET, SMCI (SMCI) shares surged over 13% in pre-market trading following the release of its preliminary Q1 fiscal 2027 performance update, rising above $35 and poised to target the $40 mark.

Q1 Revenue Guidance Substantially Raised as AI Server Demand Exceeds Previous Expectations

According to SMCI's latest estimate, revenue for the first quarter of fiscal 2027 ending September 30 will range between $18.5 billion and $19.5 billion, significantly higher than the company's previous guidance of $14.5 billion to $15.5 billion. Based on the midpoint of $19 billion, the year-over-year growth is close to 280%. The company stated that the upward revision in revenue was mainly driven by increased demand for AI platforms.

Meanwhile, the guidance showed a noticeable improvement in gross margin. SMCI expects its first-quarter gross margin to reach 12.0%–12.5%, higher than its previous forecast of 10.4%–10.8%, which was mainly related to changes in the customer and product mix. One of the market's main previous concerns regarding the company was lower profit margins during the rapid volume expansion of AI servers; therefore, the simultaneous upward revisions to both revenue and gross margin allow this guidance to reflect not only order growth, but also an improved profit structure compared to original projections.

Market consensus for the quarter's revenue was previously around $15 billion, making the latest forecast about $4 billion higher than market expectations. Following the announcement, AI server-related stocks such as Dell and HPE also rose in tandem, indicating that the market views these numbers as an indicator that demand for AI data center hardware remains at a high level.

SMCI Stock Price Technical Analysis

SMCI daily stock price chart, Source: TradingView

Looking at the daily chart of SMCI's stock price, the overall trend shows a clear triangle consolidation pattern characterized by lower highs and higher lows. However, with the release of positive preliminary earnings results, the stock price briefly broke above the key resistance level of $35 in pre-market trading, restoring bullish market sentiment.

Currently, if the stock can sustain its pre-market momentum at today's open and hold firmly above the key resistance level of $35, it will open up upside space toward the next resistance level at $40. Beyond that, it could test the downtrend line connecting recent highs near $46.

On the downside, the primary support below to watch is around $30–$31. If the stock falls below $30, it may pull back toward the support level near $24.