TRADE SETUP

Where do we stand fundamentally?

Q3 FY2025 Earnings: SMCI reported $4.6 billion in revenue (down 19% sequentially) and EPS of $0.31, missing estimates of $5.01 billion and $0.41, respectively. Gross margins dropped to 9.7% from 11.9% due to delayed customer orders and inventory write-downs during the transition to Nvidia’s Blackwell GPUs.

Guidance: SMCI cut its FY2025 revenue guidance to $23–$25 billion but remains optimistic about $40 billion in FY2026, driven by Direct Liquid Cooling (DLC) technology adoption in data centers

SMCI is bouncing off the 31 level and is extending higher. This bounce can be used for a short-term, low-risk long trade entry.

We need a sustained breakout above 50 for the rally higher to continue. I am inclined to a long trade entry in the short term due to consolidation bottom being over.

_{I am taking a near-term long-trade entry with a SL below 31.50 to target 59. You can buy call options as well.}