SMCI Stock Price Forecast: $60 Billion AI Server Orders Ignite Rally, Stock Surges 20%, Can the Stock Price Continue to Rise?

TradingKey - As of July 21 ET, SMCI ( SMCI) jumped 7% on the day, reaching an intraday high of $25.54, and soared 20.58% in after-hours trading. The core driver behind this surge was the company's newly released Q4 FY2026 earnings preview, which projected revenue near the lower end of its previous guidance, but a gross margin significantly above expectations, alongside new orders exceeding $60 billion, indicating that AI server demand remains strong.

SMCI after-hours stock chart, Source: FUTUBULL

Why SMCI Shares Are Rising

The primary reason for the rise in SMCI's stock price is that its gross margin significantly exceeded market expectations. The company expects GAAP and non-GAAP gross margins for the fourth quarter of fiscal 2026 to be between 15% and 17%, far higher than its previous guidance range of 8.2% to 8.4%. For SMCI, one of the market's main concerns over the past few quarters has been that despite strong demand for AI servers, profit margins remained low. This near-doubling of gross margin expectations suggests that the company's product mix, customer portfolio, and pricing power may be improving. The company also stated that the gross margin expansion was mainly driven by a more favorable customer and product mix.

The second reason for the rally is that the scale of AI server orders substantially exceeded expectations. SMCI stated that new orders in the fourth quarter exceeded $60 billion, with the backlog rising to a record high by the end of the period, and expects these orders to be delivered over the next few quarters. For the market, the $60 billion in orders not only represents enhanced short-term revenue visibility but also indicates that demand from big tech, cloud service providers, and AI infrastructure customers for high-performance servers, rack-scale systems, and liquid cooling solutions remains robust. Although the market had previously worried about a potential slowdown in AI server demand, this order data reinforces the trading logic that the 'AI infrastructure cycle is still expanding.'

However, SMCI's latest rally does not mean that all risks have been cleared. The company expects fourth-quarter revenue to remain near the lower end of its $11 billion to $12.5 billion guidance range, which IBD reported is still below consensus market expectations. Therefore, the key to this rally is not a revenue beat, but rather that the combination of 'gross margin improvement + explosive order growth' has boosted market sentiment.

Can SMCI Stock Price Continue to Rise?

Whether SMCI's stock price can continue to rise hinges on three key variables: whether orders can translate into revenue, whether the improvement in gross margin is sustainable, and whether official financial reports can verify its cash flow and delivery capabilities.

First, the $60 billion in orders provides strong support for SMCI's future revenue, but investors still need to focus on order quality. The company also cautioned in its official update that some orders may not constitute firm commitments and could be subject to risks of cancellation or delay. This means the market cannot simply equate the entire $60 billion in orders to guaranteed revenue. Subsequent official financial reports and earnings calls will need to further explain what types of customers these orders come from, how long the delivery cycles are, whether gross margins are stable, and whether additional financing or inventory investment is required.

Second, whether the gross margin can be maintained in the 15%-17% range is core to whether the stock price can continue to rebound. If the current gross margin improvement is merely a one-time change in customer mix, the stock rally may be unsustainable; however, if management can demonstrate that high-end AI servers, liquid cooling systems, and modular data center solutions are boosting overall profit margins, the market may upwardly re-rate SMCI's valuation. Previously, SMCI's stock price was under pressure largely because the market feared it would fall into low-margin hardware competition; now, the gross margin improvement allows investors to see once again the potential that 'high growth in AI servers can also drive profit elasticity.'

Meanwhile, AI server demand remains a medium- to long-term pillar of support. As large tech companies, AI labs, sovereign AI projects, and enterprise AI applications continue to expand their investment in computing power, demand for servers and liquid-cooled data center infrastructure still has room to grow. If SMCI can consistently secure orders from major customers and maintain solid profit margins during delivery, it will have the opportunity to continue benefiting from the AI hardware cycle, driving its stock price further upward.

SMCI Stock Price Technical Analysis

SMCI stock price weekly chart, Source: TradingView

Looking at the weekly chart of SMCI's stock price, the overall trend shows a pattern of gradually decreasing candlestick highs and gradually increasing lows. The candlestick structure may form a triangular convergence pattern, which means the stock price will remain within the range of $21-$47 in the short term.

Currently, supported by the positive earnings preview, SMCI's short-term bullish momentum has been significantly strengthened. The primary target for a short-term rise may be to test the resistance level at $30. If the stock price breaks through this level, the upside space toward $40 will open up. Further up, it may test the upper boundary of the triangular convergence range around $45-$50. If the stock price further breaks through the upper boundary of the triangular convergence range, it is expected to test the resistance level at $70.

On the downside, the primary support level to watch is $23.38. If it falls below this level, the stock price will test downwards toward the lower boundary of the triangular convergence range near $21-$20.