11:57 AM EDT, 04/24/2024 (MT Newswires) -- Super Micro Computer's ( SMCI ) fiscal Q3 earnings will likely exceed expectations slightly, followed by guidance that meets prior expectations, Wedbush said in an earnings preview Wednesday.

Original equipment manufacturers, or OEMs, like Super Micro, will likely see reduced supply chain issues as strong demand for artificial intelligence servers is expected in calendar Q1 and Q2 and shortages of graphics processing units are diminishing, according to the note.

The firm said that the backlog of orders from 2023 and early 2024 provided sales visibility to OEM server vendors at least through Q2.

Given tight supply conditions and deals arranged before server delivery, margins are unlikely to deviate significantly from management's prior guidance or the projected model, Wedbush added.

The firm said it maintains a neutral view given the uncertainty that the company will revise the outlook because of past fluctuations.

Super Micro Computer's ( SMCI ) fiscal Q3 earnings report is slated for Tuesday.

Wedbush reiterated its neutral rating on the company's stock and kept the price target at $530.

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