Supermicro's gross margin just shattered expectations, sending shares surging, but management quietly buried a number in the earnings call that changes everything investors think they just bought.
Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction) closed most recently at $39.59, up 25.8% over one month and 27.9% year to date, yet still 1.1% lower over the trailing year. The rally traces to a fiscal fourth-quarter 2026 report in which non-GAAP gross margin blew past guidance. Did investors buy a structural margin reset or a one-quarter timing artifact? As it turns out, management answered that question on the earnings call.
What the Market Thinks It Bought The bull case is genuine. Non-GAAP EPS came in at $1.70 against a $0.9575 estimate, revenue grew 93.16% year over year, and CEO Charles Liang cited “more than $60 billion in new orders, and booked record backlog entering fiscal 2027.” Full fiscal 2027 revenue guidance is $65.0 billion to $72.0 billion. Some of last week’s strength was sector-driven; TradingView, on September 4, 2026, headlined the story “Supermicro’s Revenue Boom Just Ran Into a Profit Test.”
What the Margin Number Actually Was Reported non-GAAP gross margin was 17.6% versus guidance of 8.2% to 8.4%, a 750 basis point sequential jump. CFO David Weigand said favorable mix “contributed approximately 75% of the gross margin improvement,” with the remainder attributable to lower tariff costs and lower inventory reserves, which he called a “non-recurring event.” The mix itself was inflated by “the deferral of several contracts from Q4 fiscal year 26 to Q1 fiscal year 27.” Lower-margin revenue slipping out lifts the percentage without improving the business. Liang said, “This margin expansion mainly came from our strategy focused on balancing customer mix and product mix while having a one-time positive contribution for the quarter.” Revenue landed near the low end of the $11 billion to $12.5 billion range on customer readiness delays. Miss on top line, beat on margin, same cause.
Guidance Nobody Talked About Management guided current-quarter non-GAAP gross margin to 10.4% to 10.8%, well below the reported 17.6%. A quiet period begins at the close of business on Friday, September 11, 2026, so this number stands.
Parts of the Bull Case That Survive Customer diversification is genuine. David Weigand noted nine customers with revenues greater than $1 billion each in fiscal year 2026, versus four in fiscal year 2025. Full-year revenue reached $39.06 billion (+77.8% year over year). (That kind of concentration in AI server buildouts is why we keep pointing readers to the power, cooling, and networking suppliers behind the data centers in a free report.)
Offsetting this is that fiscal 2026 operating cash flow was negative $6.81 billion, closing inventory rose to $12.9 billion, and the cash conversion cycle (days between paying suppliers and collecting from customers) lengthened materially. A company can grow revenue while consuming cash when it prepays inventory faster than customers pay invoices.
Dilution Nobody Prices Supermicro raised $5.6 billion in public equity, including $4.2 billion in mandatory convertible preferred (shares that automatically convert to common). The guided non-GAAP diluted share count is 761 million. David Weigand said EPS is now computed using the two-class method, allocating a portion of net income to participating convertible preferred shares.
What Has to Go Right Gross margin must hold against the new 10.4% to 10.8% guidance. The deferred contracts must land without dragging margin lower when they do. The $65.0 billion to $72.0 billion revenue range must survive a quarter of contact, and growth must start generating operating cash. This thesis will be disproved by any quarter in which revenue grows and gross margin lands at or below the full prior-year level, or any walk-back of the forward revenue range.
Committed View The market bought a margin figure that management, in its own words and its own next-quarter guide, has already told investors will not repeat. Though the growth story is intact and the order book is a genuine asset, the profitability step-up appears transitory.
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Super Micro Computer (NASDAQ: SMCI) could be entering a new long-term growth phase that may send the stock as high as $700, representing a gain of roughly 1,700%.
The bullish SMCI forecast, shared by TradingShot in a TradingView post on September 7, is based on a recurring historical pattern in which prolonged periods of lower highs and consolidation have preceded the company’s largest rallies.
The projected target implies an increase of about 1,700% from SMCI’s press-time price of $39.
The analyst believes the current setup resembles previous cycle bottoms and could mark the beginning of what he describes as an AI supercycle phase.
SMCI stock price analysis chart. Source: TradingView According to the analysis, SMCI has remained in a bearish cycle since reaching its all-time high in March 2024. The decline followed a multi-year parabolic rally that the analyst labels the company’s “Major Expansion Phase.”
However, similar corrections occurred before previous major advances. In both earlier cycles, the stock spent years trading below a descending trendline while remaining significantly under its 50-month and 100-month moving averages.
SMCI’s stock momentum The analyst noted that major bottoms formed when the monthly Relative Strength Index (RSI) began creating a rounded bottom pattern. A similar RSI formation has been developing since 2025.
If the pattern continues to play out, the analysis projects a breakout above the 1.0 Fibonacci extension level, with the 1.236 extension near $700 emerging as the next major target.
The bullish outlook is also supported by SMCI’s growing presence in the artificial intelligence infrastructure market as highlighted in its financials. In the fourth quarter of fiscal 2026, the company reported revenue of $11.1 billion, up about 93% year-over-year.
Non-GAAP diluted earnings per share came in at $1.70, well above company guidance, while gross margin expanded to 17.6% from 10.1% in the previous quarter.
For the full fiscal year, revenue climbed 78% to $39.1 billion, while net income reached approximately $2.2 billion.
Adding to the bullish case, Super Micro Computer reported more than $60 billion in new orders during the fourth quarter, creating a record backlog entering fiscal 2027.
SMCI’s role in AI infrastructure The company is increasingly positioning itself as a full AI infrastructure provider rather than solely a server manufacturer.
Its Data Center Building Block Solutions platform focuses on rack-scale, liquid-cooled systems designed for faster deployment and improved energy efficiency. The strategy is expected to support higher-margin growth as AI data center spending accelerates.
Super Micro also remains closely aligned with Nvidia’s latest AI platforms while expanding support for AMD-based systems and other AI ecosystems.
At the same time, the company continues to increase manufacturing capacity across North America and Asia to meet growing demand.
Despite these growth drivers, the stock continues to trade at a valuation discount compared to many AI-focused peers.
Investors remain cautious due to past margin volatility, customer concentration risks, working capital requirements, dilution from a capital raise, and governance concerns.
Key Takeaways SMCI's fiscal 2026 revenue nearly doubled to $39.1 billion, while backlog reached record levels.SMCI expects fiscal 2027 sales of $65-$72 billion, driven by AI infrastructure demand and record backlog. SMCI trades at lower forward P/E, P/S and P/B multiples than its industry and the S&P 500 Index. Super Micro Computer Inc. (SMCI - Free Report) designs, develops and manufactures server and storage systems optimized for artificial intelligence (AI)-powered data centers, cloud computing and edge computing workloads. The company’s solutions are based on its Server Building Block Solutions architecture.
SMCI’s fiscal 2026 revenues nearly doubled to $39.1 billion, while the company generated more than $60 billion in new orders during the fourth quarter, taking the backlog to record levels entering fiscal 2027.
The AI solutions represented about 60% of SMCI’s fourth-quarter fiscal 2026 revenues because several large projects shifted timing, but management expects AI-related solutions to exceed 80% of revenue going forward based on backlog.
The chart below shows the price performance of SMCI year-to-date.
Image Source: Zacks Investment Research
Modular Design AdvantageSMCI’s Building Block architecture remains central to its product-development model. This approach allows common server, storage, networking, power and cooling components to be reused across many system configurations. That can shorten design cycles when new CPUs and GPUs become available and supports customer-specific configurations without rebuilding the entire platform.
Management is also using factory automation, design optimization and standardized building blocks to raise manufacturing yields and streamline logistics. This combination of modular engineering and broad silicon support helps Super Micro Computer respond to shorter hardware cycles. It also supports the company’s strategy of offering application-optimized systems across enterprise, cloud, AI and edge workloads.
Transformation Toward a Complete AI Infra ProviderSuper Micro Computer is moving beyond stand-alone servers toward complete Data Center Building Block Solutions (DCBBS). This strategy integrates GPU and CPU servers, enterprise storage, direct liquid cooling, power infrastructure, high-speed switches, networking, data-center management software and lifecycle services.
SMCI said the model is intended to reduce customer time-to-deployment and time-to-online by providing a more integrated data-center build. The company is also expanding software tools such as SuperCloud Composer, Super Micro Data Center Manager and Super Micro Orchestration Manager, while adding proactive service capabilities. Management expects more software features and service products to come online early in fiscal 2027, extending the DCBBS strategy beyond hardware integration.
Liquid Cooling LeadershipRising rack density is increasing the importance of advanced cooling in AI data centers, and Super Micro Computer continues to expand direct liquid-cooling capabilities. SMCI is producing liquid-cooled rack-scale systems for current AI platforms and said most of its DLC production lines support dense 250kW-class racks.
Liquid cooling is integrated into the broader DCBBS portfolio alongside chilled doors, cooling distribution units and other infrastructure. This capability gives SMCI a broader role in high-density deployments as customers move from server purchases toward complete rack-scale systems.
Robust Clientele Some of the largest customers of SMCI include NVIDIA Corp. (NVDA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) and Intel Corp. (INTC - Free Report) . The company is a big beneficiary of the booming AI-empowered hardware market.
In fourth-quarter fiscal 2026, the company shipped volume products across NVDA’s GB300 NVL72, HGX B300, B200 NVL4 and RTX 6000 Pro lines. SMCI is also preparing systems based on NVIDIA Vera Rubin and Vera CPU platforms.
Super Micro Computer launched AMD’s Helios product line and MI450 Total Solution while continuing to support MI350 and MI355X systems. Intel Xeon 6+ platforms are shipping in volume, and the company is developing systems for Arm-based AGI processors.
Strong GuidanceFor the first quarter of fiscal 2027, Super Micro Computer expects net sales of $14.5-$15.5 billion, with non-GAAP adjusted earnings of $1.01-$1.10 per share. SMCI expects first-quarter fiscal 2027 non-GAAP gross margin to be between 10.4% and 10.8%, significantly below the unusually strong fourth-quarter level as customer and product mix normalizes.
For full-year fiscal 2027, SMCI expects net sales of $65-$72 billion compared with $39.1 billion in fiscal 2026. The outlook reflects continued AI infrastructure demand, record backlog and increasing contributions from enterprise, sovereign AI, NeoCloud and agentic AI opportunities.
Solid Estimate RevisionsSuper Micro Computer has an expected revenue and earnings growth rate of 71.8% and 22%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 30.3% over the last 30 days.
SMCI has an expected revenue and earnings growth rate of 19.6% and 18.7%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 42.2% over the last 30 days.
Image Source: Zacks Investment Research
Attractive Valuation Super Micro Computer is currently trading at an attractive valuation compared to its peers. The stock has a forward price/earnings (P/E) of 8.94X, compared with the industry’s P/E of 10.36X and the S&P 500’s P/E of 18.52X. It has a price/sale (P/S) of 0.67X, compared with the industry’s P/S of 5.32X and the S&P 500’s P/S of 3.09X. SMCI has a price/book (P/B) of 2.32X, significantly lower than the industry’s P/B of 16.38X and the S&P 500’s P/B of 3.71X.
Investment ThesisSMCI currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The stock price has surged 35% year to date. Yet, SMCI is currently trading at a 32.6% discount to its 52-week high price level.
Image Source: Zacks Investment Research
Super Micro Computer remains positioned to benefit from expanding AI infrastructure demand, supported by rapid adoption of new GPU platforms, its modular Building Block architecture, liquid-cooling expertise and a broader DCBBS offering. SMCI’s strong customer partnership combined with record backlog, rising shipments and expanding product portfolio, positions the company to benefit in the long term.
Daily price chart for Tesla showing price at 354.08, testing support beneath the 50 EMA (358.07) and the 200 EMA (380.31). Source: TradingView The market for Tesla looks like it is trying to recover a little bit. It remains caught between the traditional EV business and the much larger valuation narrative around FSD, Cybercab, and autonomous driving.
The most important news today right now is a little bit mixed. Tesla has gotten approval in Slovenia for FSD Supervised, becoming the sixth EU country to allow it ahead of a broader European vote.
At the same time, Tesla’s Cybercab rollout is facing some regulatory scrutiny, which directly hits the part of the story investors are currently focused on.
This combination explains a conflicted tape, but when we look at the technical analysis, we just bounced from the 200-day EMA after filling a gap, and now we’re testing an area that previously had been supported.
A little bit of consolidation from a technical analysis standpoint would make a certain amount of sense.
The AI infrastructure space features many companies that are growing at a dramatic clip. However, growth alone is often not enough to satisfy many investors. Some of the fastest-growing names in this space also have among the most investors betting against them.
Three AI companies stick out, with investors selling short a huge percentage of their public floats, indicating significant pessimism among many market participants. However, these companies also have avenues to potentially prove short sellers wrong as they look to improve profitability metrics.
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Super Micro Computer: Data Center Building Blocks Solution Aims to Improve Margin ProfileSuper Micro Computer Today
SMCI
Super Micro Computer
$40.26 +0.67 (+1.69%)
As of 09/8/2026 04:00 PM Eastern
$19.48▼
$58.7812.58
$42.13
First up is AI server giant Super Micro Computer NASDAQ: SMCI. Investors have sold approximately 18% of its floated shares short, making Super Micro one of the most-shorted stocks in the market.
There are multiple reasons that investors may be betting on this name to fall. First off, shares are up over 30% in one month, creating more downside potential that shorts can profit from. Additionally, the company’s growth is rapid, but its profitability profile is a real concern. Analysts expect sales to grow by nearly 200% year-over-year (YOY) next quarter to almost $15 billion, but forecast a gross margin below 11%. This very low margin makes it difficult for the company to convert much of its sales into earnings.
However, one key offering that could potentially help Super Micro improve its profitability over time is its data center building blocks solution (DCBBS). Super Micro describes DCBBS as a turnkey ecosystem that allows customers to build AI data centers in quarters rather than years. This comes as it integrates a wide variety of key data center components, from processors to networking to cooling systems and software.
With this, it will be important to monitor mentions of DCBBS’s revenue contribution and DCBBS deal signings. Notably, the company says that the platform will soon contribute significant net income, another factor to watch.
CoreWeave Adds Record Active Power, But Profits Are Under PressureCoreWeave Today
$99.83 +10.47 (+11.72%)
As of 09/8/2026 04:00 PM Eastern
$60.55▼
$153.20$141.90
CoreWeave NASDAQ: CRWV also finds itself among the list of AI stocks with very high short interest. Investors have sold nearly 17% of the company’s floated shares short. Not unlike Super Micro, the company is posting blistering growth but has profitability issues.
Sales increased by 112.5% YOY last quarter to $2.575 billion, but earnings moved in the opposite direction. The company’s loss per share greatly increased to -$1.14, and free cash flow fell much further into negative territory, coming in at -$5.74 billion. Additionally, CoreWeave’s long-term debt rose by more than 270% YOY to $27.56 billion.
For CoreWeave, it is critical that the company closes the gap between its revenue and cash flow and its capital expenditures. One factor that can help with this is bringing online its in-progress data centers as quickly as possible. This can maximize the revenue CoreWeave generates from each facility over time to offset costs.
Notably, the company added 500 megawatts of actively powered data centers last quarter, more than any quarter in its history. It now has 1.5 gigawatts of actively powered data centers, with the company targeting eight gigawatts by 2030. Investors should monitor CoreWeave’s active power additions each quarter and its ability to increase its overall active power consistently over time.
Expenditures Set to Balloon as IREN Eyes Huge Jump in Operating Run-RateIREN Today
$46.93 +2.25 (+5.04%)
As of 09/8/2026 04:00 PM Eastern
$27.05▼
$76.87$81.57
IREN NASDAQ: IREN operates a somewhat similar business model to CoreWeave, falling in the neocloud category. However, the company has its roots in bitcoin mining and has since converted much of this infrastructure to serve the AI market. There is clearly a large cohort of investors who are skeptical of the company’s future, with nearly 28% of its floated shares sold short.
Notably, IREN has a $9.7 billion contract with Microsoft NASDAQ: MSFT. However, turning that deal into actual sales comes with execution risk and massive costs. To support this and other deployments, IREN expects to spend $25-30 billion on capital expenditures between now and Q2 2027. These figures tower over the company’s small revenue base today.
Sales came in at just $137 million last quarter, and its operating annualized run rate (ARR) revenue is $1 billion. However, the company expects to make significant progress on this front soon, targeting an increase in operating ARR to $4 billion next quarter. This comes as IREN plans to bring a large amount of data center capacity online. This would greatly increase the company’s revenue base, improving profits over time, after it posted a net loss of $684 million last quarter.
Whether IREN actually delivers on this figure will be among the most critical aspects to watch in its next earnings report. From there, the company will need to continue making strong progress in adding more capacity to maximize its data center revenue.
Short Sellers Are Targeting Growth, But Execution Will Decide the TradeIREN’s percentage of floated shares sold short is by far the highest in this group, indicating particularly high bearish sentiment among short sellers. Interestingly, Wall Street analysts are showing the most optimism about IREN among the group. The MarketBeat consensus price target of $81.57 implies more than 80% upside.
Still, the broader takeaway is not just about IREN. Super Micro, CoreWeave, and IREN all show the same tension running through the AI infrastructure trade: demand is enormous, but investors want clearer evidence of margin expansion, cash flow improvement and disciplined capital spending.
Short sellers may be focused on the risks, but these companies still have ways to challenge the bear case. For Super Micro, that means proving DCBBS can support profitability. For CoreWeave, it means turning capacity additions into better cash flow. For IREN, it means showing that contracted AI revenue can scale fast enough to justify the spending required to support it.
Should You Invest $1,000 in Super Micro Computer Right Now?Before you consider Super Micro Computer, you'll want to hear this.
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Super Micro Computer (SMCI - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this server technology company have returned +25.8% over the past month versus the Zacks S&P 500 composite's -0.4% change. The Zacks Computer- Storage Devices industry, to which Super Micro belongs, has gained 24.3% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Super Micro is expected to post earnings of $1.06 per share, indicating a change of +202.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +59.4% over the last 30 days.
The consensus earnings estimate of $4.43 for the current fiscal year indicates a year-over-year change of +22%. This estimate has changed +35.9% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $5.26 indicates a change of +18.7% from what Super Micro is expected to report a year ago. Over the past month, the estimate has changed +42.1%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Super Micro.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Super Micro, the consensus sales estimate of $14.77 billion for the current quarter points to a year-over-year change of +194.3%. The $67.12 billion and $80.27 billion estimates for the current and next fiscal years indicate changes of +71.8% and +19.6%, respectively.
Last Reported Results and Surprise HistorySuper Micro reported revenues of $11.12 billion in the last reported quarter, representing a year-over-year change of +93.2%. EPS of $1.7 for the same period compares with $0.41 a year ago.
Compared to the Zacks Consensus Estimate of $11 billion, the reported revenues represent a surprise of +1.09%. The EPS surprise was +150%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates two times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Super Micro is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Super Micro. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
AI server stocks are surging while the broader market sits flat, but the margin beat driving the biggest gain carries a built-in expiration date that management already acknowledged on the earnings call.
AI server names are trading higher on Tuesday, with buyers rotating into the sub-sector while large-cap technology tracks essentially flat. The unusual part: the biggest gainer of the trio is being bid on a margin figure that its own management has already guided back down.
Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction) stock is up 4% to $41.07 in midday trading, extending its 40% year-to-date gain. Meanwhile, Hewlett Packard Enterprise (NYSE:HPE) stock is climbing 5% to $54.71 on no fresh company news of its own. The Invesco QQQ Trust (NASDAQ:QQQ) is essentially unchanged, so the rally is narrow to the AI server corner.
The read-through matters here. Super Micro Computer posted a fiscal Q4 2026 non-GAAP gross margin well above its own guide, then reset the current-quarter bar back near prior levels. The market’s response is to treat the beat as the signal.
Margin Beat Fuels the Rebound Super Micro Computer’s non-GAAP gross margin came in at 17.6% for fiscal Q4, well above the low single-digit range it had guided going in. Chief financial officer David Weigand attributed most of the improvement to favorable customer and product mix, with the balance from lower tariff costs and lower inventory reserves. He described the reserve benefit as a non-recurring event.
Weigand also tied Super Micro Computer’s favorable mix to the deferral of several contracts out of the fourth quarter into fiscal 2027. Chief executive Charles Liang framed the expansion as a strategy of balancing customer mix and product mix, with a one-time positive contribution layered on for the quarter. Revenue landed near the low end of the guided range on customer-readiness delays, so the same cause produced both a top-line miss and a margin beat.
Guidance Puts the Beat in Context Super Micro Computer’s current-quarter non-GAAP gross margin guide runs 10.4% to 10.8%. That’s a full step down from the 17.6% the company just reported, and it lines up with the compressed profile that showed up through the middle of fiscal 2026, according to Super Micro. Management also flagged that the inventory-reserve tailwind wouldn’t persist.
The fiscal 2026 arc frames the debate. Super Micro Computer’s GAAP gross margin ran 9.3% in fiscal Q1 2026, then 6.3% in Q2, then recovered to 9.9% in Q3 before the fiscal Q4 earnings report. The current-quarter guide points back toward that trajectory.
That’s the tension in the tape. Super Micro Computer’s order book and growth are real, with fiscal 2027 revenue guided to $65 billion to $72 billion and a record backlog behind it. However, the profitability line that drove today’s headline reset carries a shorter shelf life than the buying suggests.
Peers Move Higher on the Same Setup Hewlett Packard Enterprise stock is actually outpacing Super Micro Computer stock on the session, with no company-specific catalyst attached today. HPE’s most recent quarterly report showed record revenue of $12.21 billion and a non-GAAP gross margin of 40%, and management raised its fiscal 2027 framework, according to Super Micro. AI systems orders reached $2.4 billion for the quarter, with a pipeline management described as multiples of backlog.
HPE also warned that gross margin would moderate toward more historical levels as AI systems become a bigger mix, echoing the same tension visible in Super Micro Computer’s guide. That’s the through-line across the group: booming demand and normalizing margins.
Dell Technologies (NYSE:DELL) rounds out the AI server trio, having reported record AI orders of $60.9 billion and lifted its full-year fiscal 2027 revenue guide to $192 billion, according to Super Micro. With the broad tape holding flat while all three server names climb, today’s move reads as a narrow sub-sector rotation confined to AI infrastructure (we profiled seven suppliers powering that buildout, from power to cooling, in a free report you can grab here). DELL stock was up 0.4% to $526.08 as of 11:30 a.m. ET on Tuesday.
What to Watch Next Super Micro Computer’s next data point is its fiscal Q1 2027 report, when the market can test whether the deferred contracts convert cleanly and whether gross margin lands inside the 10.4% to 10.8% band that management set. The order book and the fiscal 2027 revenue framework are the durable anchors, though the current-quarter margin figure is what will settle the debate opened by today’s move, according to Super Micro.
Investors sizing their exposure to Super Micro Computer can weigh the reported margin against the guided one, since the gap between what fiscal Q4 showed and what the current-quarter guide implies is where the risk sits. Moreover, traders may want to watch for a broadening or narrowing of the AI server rotation as HPE’s supply commentary and Dell’s backlog conversion shape the read-through. Moderate sizing on their positions seems appropriate while that gap stays open.
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Short Sellers Are Betting Against 3 AI Infrastructure Stocks—What Could Turn the Tide?Super Micro Computer NASDAQ: SMCI said demand for AI infrastructure remains strong as the company works to expand its customer base, increase the value of its systems offerings and improve cash conversion through more favorable customer contracts.
Speaking at Citi's Technology Conference, Michael Staiger, Super Micro's senior vice president of corporate development, said the company's fiscal 2026 growth rate was 78% and noted that its quarterly revenue guidance midpoint now stands at $15 billion. He contrasted that figure with a $14.9 billion annual revenue level the company discussed several years earlier.
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Pushing the Edge: Super Micro Computer Reboots the AI LandscapeStaiger attributed the demand backdrop to accelerating AI application development and a widening array of technology platforms from partners including NVIDIA, AMD, Intel and Arm. He said Super Micro is focused on supplying application-optimized systems and integrated AI factory solutions rather than simply selling individual servers.
Demand diversification and AI adoption Super Micro said its customer diversification has broadened beyond the largest customers that initially drove major AI infrastructure deployments. Staiger pointed to enterprises, neocloud providers and sovereign customers as groups building infrastructure for AI workloads.
SMRs Spark a Chain Reaction for Nano NuclearWhile the company did not provide a revenue breakdown among those categories, Staiger said enterprise AI adoption is gaining traction. He cited recent activity involving VMware's VCF for AI Factory stack and Super Micro's engagement with Cisco as indications that enterprise adoption is expanding.
“We're early stages, but it's spreading out,” Staiger said of enterprise AI adoption.
The company expects some customer concentration to remain, particularly among large customers, but said it has historically expanded alongside customers by broadening the systems and capabilities it provides. Staiger also said hyperscalers are deploying workloads within Super Micro's broader customer base.
Integrated systems, margins and services A central component of Super Micro's strategy is its Data Center Building Block Solutions, or DCBBS, approach. Staiger said the model is designed to provide customers with validated, integrated systems that incorporate computing, networking, storage, power and cooling components.
He said the strategy is particularly useful for enterprises, neoclouds and sovereign customers that may lack the engineering resources of hyperscalers to deploy complex AI infrastructure. By delivering pre-validated systems, Super Micro aims to help customers avoid equipment sitting idle because of integration, networking, storage, power or cooling issues.
Staiger said the company is investing in go-to-market capabilities and services, including its “L12” validation services. He said the investments are included in the company's guidance and operating model, while Super Micro remains focused on operating-expense efficiency.
On gross margin, Staiger said Super Micro provides guidance one quarter at a time because the mix of business can vary. However, he said the company's longer-term internal objective is to reach double-digit gross margins and raise that level over time.
The company recently reported a quarter with gross margin of “17 and change,” according to Staiger. He said adding components such as power and cooling, as well as providing more integrated solutions, can create more value for customers and support higher margins.
Working capital, inventory and funding Staiger acknowledged that revenue can be uneven from quarter to quarter when customer sites or supplier operations face challenges. But he said Super Micro has historically captured delayed revenue downstream and expects diversification and greater planning visibility to improve execution.
The company reported $12.9 billion of inventory and inventory days of roughly 119, according to the discussion. Staiger said concerns about product obsolescence are overstated, describing prior inventory charges as minor and noting a recent reversal. He said demand has supported the ability to place systems across different tiers of the market.
Super Micro also discussed efforts to improve operating cash flow and reduce capital intensity as it grows. Staiger said its $60 billion order book, a more diversified customer base and better contract structures should support an improved cash conversion cycle.
He said some enterprise-grade customers may pay half upfront and the balance upon delivery, contrasting with terms associated with some startup customers in earlier periods that could be less favorable. The company's goal is to become self-funded over time, he said.
Asked whether the company felt adequately funded for its stated $65 billion to $72 billion growth outlook, Staiger said Super Micro was comfortable with what it sees currently.
Compliance, partnerships and market opportunity Staiger said Super Micro has expanded its legal and export-control staffing, appointed a chief compliance officer and strengthened related programs following investigations discussed during the session. He said the board cleared management and that the company is committed to preventing export-control issues.
On technology partnerships, Staiger called NVIDIA a strong partner but said customer demand can shift among platforms. He said Super Micro intends to grow with NVIDIA as well as AMD, Intel and Arm, emphasizing its ability to provide AI infrastructure across a range of architectures.
Staiger referenced estimates from some of Super Micro's partners that put the total market opportunity at $2 trillion to $4 trillion. He said that if Super Micro maintained a 10% market share in a $2 trillion market, that would equate to $200 billion of revenue. He added that the company's focus on performance-oriented, value-oriented and integrated solution offerings could broaden its addressable opportunity.
“We are positioned to be able to deliver AI infrastructure of any nature, of any kind to the customer base, and in a total package, in a total factory,” Staiger said.
About Super Micro Computer (NASDAQ:SMCI)Super Micro Computer, Inc (Supermicro) is a technology company that designs, develops and manufactures high-performance server, storage and networking solutions for enterprise, cloud, data center, high performance computing (HPC) and edge computing customers. The company's product portfolio includes rackmount and blade servers, storage subsystems, motherboards, chassis, power supplies and networking components, with an emphasis on high-density, energy-efficient configurations and platforms optimized for GPU-accelerated workloads and artificial intelligence applications.
Headquartered in San Jose, California, Supermicro combines in-house engineering with a global manufacturing and distribution footprint to deliver configurable, application-specific systems.
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Super Micro has outpaced the S&P 500 this year, yet its peers left it far behind, and a key cash flow problem explains why the $50 price target remains out of reach for now.
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AI infrastructure was the dominant equity story of 2026, and the leaderboard inside that theme separates the three biggest server names sharply. For the bigger-picture context, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 13% year to date through Friday’s close while the iShares U.S. Technology ETF (NYSE ARCA:IYW) has rallied 26% in 2026 so far. Amid that backdrop, three AI-server providers have posted very different results.
Notably, Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction) stock closed Friday at $39.59, up 35% year to date. Dell Technologies (NYSE:DELL) stock ended at $524.14, up 320% year to date. Meanwhile, Hewlett Packard Enterprise (NYSE:HPE) stock finished at $52, up 118% year to date.
That ranking reads as a market verdict on margin quality and cash generation, since AI-server demand itself remains historically strong across all three names. The $50 threshold in the title sits above where sell-side analysts currently see fair value, and the rating mix leans toward hold rather than buy, though the same buildout is lifting a wider set of suppliers we broke down in a free report on the AI infrastructure names beyond the chipmakers.
What Drove Super Micro’s Year Super Micro Computer did most of its year’s work in a single August window. The company reported Q4 FY2026 non-GAAP EPS of $1.70 against a $0.9575 consensus, on revenue of $11.12 billion that grew 93.2% year over year. Non-GAAP gross margin jumped to 17.6% from 10.1% the prior quarter.
CEO Charles Liang disclosed more than $60 billion in new orders during the quarter and record backlog entering fiscal 2027. Super Micro’s management guided its FY2027 revenue to a range of $65 billion to $72 billion, well above FY2026’s $39.1 billion. That combination of margin recovery and forward book is what pulled SMCI stock off of its April low of $27.
Why the Diversified Peers Ran Further Dell Technologies is the standout of the group. Dell reported Q2 FY2027 non-GAAP EPS of $7.04 on revenue of $46.97 billion, booked $60.9 billion in AI orders during the quarter, and lifted full-year revenue guidance to $192 billion with AI-server revenue guided to $74 billion. The company also produced $2.2 billion in operating cash flow and returned a record $4.3 billion to shareholders in the quarter.
Hewlett Packard Enterprise reported Q3 FY2026 non-GAAP EPS of $1.11 on revenue of $12.21 billion, with networking revenue up 74.9% year over year. Furthermore, HPE raised its FY2026 non-GAAP EPS guidance to $3.75 to $3.85 and framed FY2027 free cash flow at a minimum of $5 billion. Both peers turned AI demand into cash this year, while Super Micro Computer’s FY2026 operating cash flow came in at negative $6.8 billion on a $12.9 billion inventory build.
What Would Push SMCI to $50 Getting SMCI stock from $39.59 to $50 asks the market to pay a higher multiple than sell-side analysts currently model. The path runs through the fiscal 2027 report cycle. Super Micro’s Q1 FY2027 guidance calls for revenue of $14.5 billion to $15.5 billion and non-GAAP EPS of $1.01 to $1.10, and the company needs to land in the upper half of both ranges while defending the Q4 gross-margin step-up.
Cash is the second lever. Super Micro Computer’s fiscal 2026 operating cash flow of negative $6.8 billion is the counterweight to the margin story, and CFO David Weigand pointed to improved backlog terms as the mechanism for repairing it. Stronger DCBBS mix, cleaner working capital, and closure on the board’s independent review of export-control-related transactions would each support a rerating toward the $50 mark.
What to Watch Super Micro’s Q1 FY2027 report is the next real test, and it arrives with a guide that leaves little room to disappoint on either revenue or gross margin. Investors sizing their exposure to SMCI stock can watch for a repeat of the Q4 gross-margin step-up and for the first signs that operating cash flow is turning.
Investors can check for updates on the board’s independent review, which remains an open item and a clear overhang. Position-sizing matters here given SMCI stock’s beta near 2 and a 52-week range that runs from $19.48 to $58.78. Keeping one’s Super Micro Computer share positions modest is a reasonable approach until the cash-conversion cycle improves.
Contact [email protected] for any questions or corrections.
Super Micro Computer has swung from accounting scandal fears to record AI orders, and after a blowout quarter that sent shares surging nearly 30% in a single month, our model now points to a setup where the upside and downside…
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Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction) has spent the past year whipsawing investors between record AI orders and margin scares. After a blowout Q4 that saw non-GAAP EPS of $1.70 against a $0.9575 consensus, the stock is once again at a crossroads. Our proprietary model says the next move points higher.
The 24/7 Wall St. price target for Super Micro is $44.20 over the next 12 months. With shares trading around $36.42, that implies roughly 21.7% upside. Our recommendation is buy, with high model confidence at 90%.
24/7 Wall St. Price Target Summary Metric Value Current Price $36.42 24/7 Wall St. Price Target $44.20 Upside 21.7% Recommendation BUY Confidence Level 90% A Volatile Year Into a Record Backlog SMCI has been a whipsaw. Shares are up 29.26% over the past month and 25.42% year-to-date, yet still sit 11.63% below their year-ago level and well off the $58.78 52-week high.
The August 11 fiscal Q4 report was the catalyst behind the recent bounce: revenue of $11.12 billion grew 93.16% year over year while missing the $11.56 billion consensus by 3.83%.
The bigger story was margin recovery. GAAP gross margin snapped back to 17.5% from 9.5% a year earlier as enterprise mix improved. CEO Charles Liang disclosed more than $60 billion in new orders during FY2026 and record backlog entering FY2027, with FY2027 revenue guided to $65 billion to $72 billion.
Why Bulls See a Path to $50 and Beyond The bull case is straightforward: SMCI is a direct beneficiary of the Blackwell Ultra and Rubin GPU cycles, with manufacturing capacity ramping toward 6,000 racks per month. Enterprise and channel revenue grew 172% year over year in Q4, and management expects DCBBS to be a long-term margin tailwind.
SMCI is one of the picks-and-shovels names behind the AI buildout (we profiled seven suppliers powering the data-center wave, from cooling to networking, in a free report you can grab here).
Our model’s bull case forecast targets $50.34, a 38.6% return. If FY2027 lands at the high end of guidance, forward EPS of $3.94 at a modest re-rating to 15x could support even higher levels.
What Could Go Wrong The bear case centers on cash and governance. FY2026 operating cash flow was negative $6.81 billion, and the board’s independent review of export-control-related transactions remains open.
Q4 revenue also missed consensus, and management flagged that lower inventory reserves and tariff costs were a non-recurring event. Bulls counter that the cash burn reflects working-capital build for the record backlog. Our model’s bear case is $34.66, only 4.56% below spot, suggesting downside is contained relative to the upside skew.
How SMCI Compares to Dell and HPE Dell Technologies (NYSE:DELL) is the most direct comp on AI servers. It just posted Q2 FY2027 revenue of $46.97 billion, with a record $95 billion AI backlog and full-year guidance of $192 billion. Dell trades at a trailing P/E of 23 versus SMCI at 11. On that gap alone, our $44.20 target looks conservative.
Hewlett Packard Enterprise (NYSE:HPE) is the third leg of the AI server stool, with FY2026 non-GAAP EPS guidance of $3.35 to $3.45. HPE’s growth is Juniper-boosted rather than organic AI-driven, which is why SMCI’s forward P/E of 9 looks unusually cheap against a peer group re-rating to the high teens.
SMCI Price Prediction 2026-2030 The 24/7 Wall St. price target is $44.20, our recommendation is buy, and confidence is 90%. The tipping factor is valuation: a company guiding to 66% to 84% revenue growth should not trade at 9x forward earnings.
The setup improves if the board’s export-control review closes cleanly and Q1 FY2027 tracks within the $14.5 billion to $15.5 billion range. The setup deteriorates if working capital continues to bleed cash into a slowing order book.
Year 24/7 Wall St. Price Target 2026 $44.20 2027 $45.85 2028 $49.50 2029 $54.53 2030 $60.02 These projections assume SMCI executes on its DCBBS strategy and enterprise mix continues shifting the margin profile higher. Significant upside or downside could come from GPU platform transitions, the outcome of the board inquiry, or tariff policy shifts.
Contact [email protected] for any questions or corrections.
Revenue jumped 78% to $39.1 billion last year, but investors are still waiting for more consistent margins. Summary
Supermicro expects $65 billion to $72 billion in fiscal 2027 sales
Super Micro Computer Inc. (SMCI, Financials) is not lacking demand. The AI server division recorded $39.1 billion in sales in fiscal 2026, up from $22 billion a year earlier, and set a record backlog at the start of the next fiscal year after securing more than $60 billion in new orders.
Now the tough part: translating all that growth into more consistent earnings. Supermicro's full year gross margin was marginally lower at 10.8% versus 11.1%, a small decline that is more significant when sales is growing this quickly.
The latest quarter was, nevertheless, rather encouraging. Fourth quarter revenue was more than $11.1 billion and adjusted earnings of $1.70 per share. Gross margin increased to 17.5%
It gives investors something to look at. Supermicro is forecasting revenues between $65 billion and $72 billion in fiscal 2027. At that size, even a small margin rise can result into a big profit increase.
But the opposite is true Aggressive pricing and client mix will continue to squeeze profitability, which is less of an issue if AI-server growth is high. And that's why the stock is a different bet than simply holding greater demand for AI infrastructure.
Supermicro has proven that it can sell the servers. The next hurdle is to prove it can make more money from each one. Its next catalyst will be its fiscal first quarter earnings when investors will evaluate whether the fourth quarter margin rebound was the beginning of a pattern or merely a strong quarter.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Super Micro Computer (NASDAQ:SMCI – Get Free Report) and Lenovo Group (OTCMKTS:LNVGY – Get Free Report) are both large-cap technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.
Risk & Volatility Super Micro Computer has a beta of 2, meaning that its stock price is 100% more volatile than the S&P 500. Comparatively, Lenovo Group has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.
Analyst Ratings This is a summary of current ratings and price targets for Super Micro Computer and Lenovo Group, as reported by MarketBeat.
Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Super Micro Computer 2 11 4 1 2.22 Lenovo Group 0 2 0 0 2.00 Super Micro Computer currently has a consensus target price of $42.13, suggesting a potential upside of 11.26%. Given Super Micro Computer’s stronger consensus rating and higher probable upside, analysts clearly believe Super Micro Computer is more favorable than Lenovo Group. Institutional and Insider Ownership 84.1% of Super Micro Computer shares are owned by institutional investors. Comparatively, 0.1% of Lenovo Group shares are owned by institutional investors. 16.1% of Super Micro Computer shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Profitability This table compares Super Micro Computer and Lenovo Group’s net margins, return on equity and return on assets.
Net Margins Return on Equity Return on Assets Super Micro Computer 5.71% 27.83% 9.11% Lenovo Group 0.88% 34.51% 5.14% Earnings & Valuation This table compares Super Micro Computer and Lenovo Group”s revenue, earnings per share (EPS) and valuation.
Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Super Micro Computer $39.06 billion 0.64 $2.23 billion $3.20 11.83 Lenovo Group $83.08 billion 0.60 $1.91 billion $1.03 77.77 Super Micro Computer has higher earnings, but lower revenue than Lenovo Group. Super Micro Computer is trading at a lower price-to-earnings ratio than Lenovo Group, indicating that it is currently the more affordable of the two stocks.
Summary Super Micro Computer beats Lenovo Group on 12 of the 15 factors compared between the two stocks.
(Get Free Report)
Super Micro Computer, Inc., together with its subsidiaries, develops and manufactures high performance server and storage solutions based on modular and open architecture in the United States, Europe, Asia, and internationally. Its solutions range from complete server, storage systems, modular blade servers, blades, workstations, full racks, networking devices, server sub-systems, server management software, and security software. The company provides application-optimized server solutions, rackmount and blade servers, storage, and subsystems and accessories; and server software management solutions, such as Server Management Suite, including Supermicro Server Manager, Supermicro Power Management software, Supermicro Update Manager, SuperCloud Composer, and SuperDoctor 5. In addition, it offers server subsystems and accessories comprising server boards, chassis, power supplies, and other accessories. Further, the company provides server and storage system integration, configuration, and software upgrade and update services; and technical documentation services, as well as identifies service requirements, creates and executes project plans, and conducts verification testing and technical documentation, and training services. Additionally, it offers help desk and on-site product support services for its server and storage systems; and customer support services, including ongoing maintenance and technical support for its products. The company provides its products to enterprise data centers, cloud computing, artificial intelligence, and 5G and edge computing markets. It sells its products through direct and indirect sales force, distributors, value-added resellers, system integrators, and original equipment manufacturers. The company was incorporated in 1993 and is headquartered in San Jose, California.
About Lenovo Group (Get Free Report)
Lenovo Group Limited, an investment holding company, develops, manufactures, and markets technology products and services. It operates through Intelligent Devices Group, Infrastructure Solutions Group, and Solutions and Services Group segments. The company offers commercial and consumer personal computers, as well as servers and workstations; and a family of mobile Internet devices, including tablets and smartphones. In addition, it provides laptops, monitors, accessories, smart home and collaboration solutions, augmented and virtual reality, commercial internet of things, and smart infrastructure data center solutions. Further, the company manufactures and distributes IT products, computers, computer hardware, and peripheral equipment; and offers IT, business planning, management, supply chain, finance, administration support, procurement agency, data management, intellectual property, and investment management services. Additionally, it is involved in the retail and service business for consumer electronic products and related digital services; development, ownership, licensing, and sale of communications hardware and software; and develops software and applications. Furthermore, the company distributes smartphone, tablet, server, and storage. It operates in China, the Asia Pacific, Europe, the Middle East, Africa, and the Americas. Lenovo Group Limited was founded in 1984 and is headquartered in Quarry Bay, Hong Kong.
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Shares of AI server leader Super Micro Computer (SMCI -1.51%) rallied 31.3% in August, according to data from S&P Global Market Intelligence.
Super Micro reported its fiscal fourth-quarter results in August, delivering an earnings beat and an impressive outlook for the year ahead. Furthermore, the company completed its internal investigation into the illegal diversion of certain servers to China, in violation of U.S. export controls.
The report cleared senior management of any culpability, as the compliance lapse seems to have been the work of a small number of employees. That report, combined with Super Micro's impressive margins and outlook, appeared to put some lingering worries behind the company's investors.
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Super Micro's gross margins nearly double Beyond Super Micro's corporate governance concerns, the big worry about the company has been its gross margins. Fortunately, Super Micro showed a massive improvement on that front.
June quarter earnings showed revenue up 91.7% year-over-year to $11.1 billion, which is obviously strong growth, though the top line slightly missed analyst expectations. However, Super Micro's adjusted (non-GAAP) earnings per share of $1.70 trounced expectations by a whopping $0.74.
The massive profit beat came thanks to a near-doubling of gross margins, from 9.5% in the year-ago quarter to 17.5%. Of note, Super Micro's traditional target gross margin range before the AI revolution was 14%-17%. However, as super-expensive GPU-based AI server growth took off, Super Micro's gross margins declined into the single digits.
The June quarter appeared to mark a change in the recent trend, with a 17.5% gross margin exceeding even Super Micro's traditional target range. Management attributed the higher gross margin to two main factors: first, a pivot toward enterprise servers, likely for agentic CPU-based workloads. The shift from massive training clusters to more dispersed, agentic inference AI workloads likely gives Super Micro greater pricing power with customers relative to its large, high-volume training-cluster customers, such as Space Exploration Technologies (SPCX +5.46%).
Second, Super Micro attributed the margin improvement in part to the ramp of its data center building block solutions (DCBBS). This is Super Micro's modular data center offering, which delivers faster time-to-market and lower costs through end-to-end standardization of the entire data center infrastructure. Super Micro has said DCBBS is a higher-margin product for the company.
In addition to the margin improvement, Super Micro also forecast revenue of $65 billion to $72 billion for the year ahead. That forward guidance was well above analyst estimates of $53 billion and fiscal 2026 revenues of $39 billion.
Image source: Getty Images.
Aside from earnings, on Aug. 20, Super Micro disclosed that an investigation into the smuggling of some of its servers to China found that senior management had no knowledge of or responsibility for it. The investigation also turned up new recommendations for the company's compliance program going forward.
Finally, Super Micro ended the month with another vote of confidence as enterprise networking giant Cisco announced it was adopting Super Micro's liquid and air-cooled servers as part of its Secure AI Factory offering. The new partnership gave a vote of confidence and helped ease investor fears over Super Micro's governance and technology.
Super Micro remains among the cheapest of AI stocks Even after its strong August run, Super Micro trades for just nine times this year's forward earnings estimates. That ranks it among the cheapest AI hardware stocks.
That undervaluation likely stems from lingering concerns over corporate governance and margins. However, it appears Super Micro made strides in getting past some of those concerns last month. If management keeps up the execution, Super Micro's valuation could climb, on top of its outsize earnings growth, in the quarters ahead.
HPE just raised its guidance and posted blockbuster growth, yet the stock is sinking while the broader tech market climbs. The reason why has less to do with demand and more to do with a supply problem that could haunt…
Hewlett Packard Enterprise (NYSE:HPE | HPE Price Prediction) stock is falling 5% to $27.92 in Thursday trading despite the company delivering a strong fiscal third quarter and raising its outlook for both fiscal 2026 and fiscal 2027. Meanwhile, Super Micro Computer (NASDAQ:SMCI) stock is sliding 1% to $36.64, while Dell Technologies (NYSE:DELL) stock is holding relatively steady at around $492 after Dell’s own upbeat AI infrastructure update.
HPE’s quarterly revenue climbed 34% year over year to $12.2 billion, while adjusted earnings reached $1.11 per share, comfortably above the company’s previous outlook. HPE also raised its fiscal 2026 revenue-growth forecast to 34% to 37% from 29% to 33%, yet supply constraints are giving investors a reason to look past the headline numbers.
HPE Has More Demand Than It Can Fulfill Hewlett Packard Enterprise’s Cloud & AI revenue rose 25% to $9 billion, with server revenue climbing 35% to $6.8 billion. Hewlett Packard Enterprise’s networking business was even stronger, with revenue jumping 75% to $2.9 billion, but supply limitations prevented HPE from converting more of its demand and orders into near-term revenue.
Hewlett Packard Enterprise is dealing with shortages involving memory, NAND, CPUs and drives, while management indicated that component availability remains a meaningful constraint. HPE’s inventory also increased to $11.82 billion from $7.16 billion a year earlier, reflecting efforts to secure supplies while component costs remain elevated.
Dell And Super Micro Provide Useful Context Dell Technologies offers an interesting comparison because Dell recently reported $60.9 billion of AI server orders in a single quarter and an AI backlog of $95 billion. Dell stock’s reaction to those results was initially strong, although the scale of Dell’s orders also highlighted how quickly AI infrastructure companies are having to expand their operations to meet customer demand.
Super Micro Computer has a more specialized AI-server exposure and therefore provides another useful reference point for HPE. Super Micro Computer stock is trading near $36.52 Thursday, below its 52-week high of $58.78, illustrating that strong AI infrastructure demand doesn’t automatically translate into sustained stock-market momentum.
Oracle Deal Strengthens The Bull Case Hewlett Packard Enterprise also expanded its collaboration with Oracle (NYSE:ORCL), which plans to deploy HPE Juniper Networking equipment across its AI data centers. The agreement could provide HPE with a multiyear source of networking demand as Oracle expands infrastructure for artificial intelligence workloads.
Hewlett Packard Enterprise’s fiscal 2027 framework adds another bullish element, with management now expecting revenue growth of 13% to 17% and adjusted earnings-per-share growth of 16% to 20%. HPE also expects at least $5 billion of free cash flow in fiscal 2027, suggesting the company sees its AI infrastructure expansion translating into stronger cash generation over time.
Supply Constraints Keep The Risks Elevated The iShares U.S. Technology ETF (NYSE ARCA:IYW) is up 1% to $250.69 Thursday, making HPE’s decline look more company-specific than reflective of a broad technology selloff. That contrast matters because HPE is falling despite strong results and higher guidance, suggesting investors may be more concerned about execution and component availability than about AI infrastructure demand itself.
The bullish case is that HPE’s record orders and backlog could support substantial growth once supply becomes easier to secure. The bearish case is that shortages can limit revenue, raise costs and pressure margins, while HPE’s stock had already climbed sharply this year before the latest earnings report, leaving investors with elevated expectations.
Hewlett Packard Enterprise has delivered plenty of evidence that AI infrastructure demand remains strong, but the latest reaction shows that demand alone may not be enough to satisfy shareholders. Investors can watch for whether HPE converts its large backlog into revenue more quickly as component availability improves, while also monitoring whether margins hold up as the mix shifts toward AI systems.
HPE stock could recover if supply constraints ease and the company’s raised guidance proves achievable, but the near-term setup remains complicated by component shortages and elevated expectations. Investors who want exposure to the AI infrastructure theme should consider keeping their HPE position sizes moderate, particularly while the market is still testing whether strong demand can translate into equally strong shipments and profits.
Contact [email protected] for any questions or corrections.
Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.
Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves ahead of their future growth potential. In such a situation, investors find themselves loaded up on expensive shares with limited to no upside or even a downside. So, going all-in on momentum could be risky at times.
A safer approach could be investing in bargain stocks with recent price momentum. While the Zacks Momentum Style Score (part of the Zacks Style Scores system) helps identify great momentum stocks by paying close attention to trends in a stock's price or earnings, our 'Fast-Paced Momentum at a Bargain' screen comes handy in spotting fast-moving stocks that are still attractively priced.
There are several stocks that currently pass through the screen and Super Micro Computer (SMCI - Free Report) is one of them. Here are the key reasons why this stock is a great candidate.
A dash of recent price momentum reflects growing interest of investors in a stock. With a four-week price change of 22%, the stock of this server technology company is certainly well-positioned in this regard.
While any stock can see a spike in price for a short period, it takes a real momentum player to deliver positive returns for a longer time frame. SMCI meets this criterion too, as the stock gained 26.4% over the past 12 weeks.
Moreover, the momentum for SMCI is fast paced, as the stock currently has a beta of 2. This indicates that the stock moves 100% higher than the market in either direction.
Given this price performance, it is no surprise that SMCI has a Momentum Score of B, which indicates that this is the right time to enter the stock to take advantage of the momentum with the highest probability of success.
In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions has helped SMCI earn a Zacks Rank #1 (Strong Buy). Our research shows that the momentum-effect is quite strong among Zacks Rank #1 and #2 stocks. That's because as covering analysts raise their earnings estimates for a stock, more and more investors take an interest in it, helping its price race to keep up. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Most importantly, despite possessing fast-paced momentum features, SMCI is trading at a reasonable valuation. In terms of Price-to-Sales ratio, which is considered as one of the best valuation metrics, the stock looks quite cheap now. SMCI is currently trading at 0.62 times its sales. In other words, investors need to pay only 62 cents for each dollar of sales.
So, SMCI appears to have plenty of room to run, and that too at a fast pace.
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Dell just handed Wall Street a number so large it forced analysts to reopen their models on a Wednesday morning, and the ripple through enterprise hardware is anything but even.
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Shares of Dell Technologies (NYSE:DELL | DELL Price Prediction) are reversing Tuesday’s pre-earnings selloff after the company posted a record AI order book and lifted its full-year outlook, dragging enterprise hardware peers along with it. The move is one of the widest single-day gains for a mega-cap hardware name this year, and it’s reshaping how the market thinks about who monetizes the AI infrastructure buildout.
Dell stock is up 9% to $463 in early Wednesday trading. Meanwhile, Hewlett Packard Enterprise (NYSE:HPE) stock is climbing 4% to $53 on read-across from its closest enterprise peer. Super Micro Computer (NASDAQ:SMCI) stock is ticking up 1% to $37, the clear laggard of the group despite carrying the purest AI server mix of the three.
Broader tech benchmarks are flat. The iShares U.S. Technology ETF (NYSEARCA:IYW) is unchanged at $248. The Invesco QQQ Trust (NASDAQ:QQQ) is down 0.2% to $706. The move in Dell Technologies stock reverses the selloff the shares ran into ahead of Tuesday’s post-close report.
Record $95 Billion Backlog Fuels the Move Dell posted fiscal Q2 2027 revenue of $47 billion, up 58% year over year, with adjusted EPS of $7.04, up 203%. Net income was $4.6 billion, up 189%, on operating income of $5.9 billion. The headline catalyst was $60.9 billion in AI server orders during the quarter, of which $16.4 billion was recognized as revenue.
The company exited the period with a record $95 billion AI backlog and an AI customer base above 6,500. Infrastructure Solutions Group revenue hit a record $31.8 billion, including $10.5 billion from traditional servers and networking and $4.9 billion from storage. Client Solutions Group revenue was $15 billion.
The bigger jolt was the outlook. Dell raised its fiscal 2027 revenue guide by $25 billion to $192 billion, and now expects AI server revenue to triple to $74 billion for the year. Management also guided Q3 revenue to $49 billion at the midpoint with non-GAAP EPS of $6.50.
CEO Jeff Clarke stated in the earnings release: “With AI momentum accelerating and our opportunity expanding across the portfolio, we’re raising our full-year FY27 revenue outlook by $25 billion to $192 billion, up nearly 70% year over year.” That’s the sentence sell-side desks are re-underwriting against this morning.
Uneven Read-Across in AI Server Land Hewlett Packard Enterprise stock is riding sympathy flows as the closest enterprise AI server competitor to Dell Technologies. The category tends to trade as a bloc when a print of this magnitude lands. Hewlett Packard Enterprise stock was up 114% year to date through Tuesday’s close, so the read-through is arriving on top of an already strong run for HPE.
Super Micro Computer stock is the laggard even though it carries the purest AI server exposure of the three. Super Micro stock was up 25% year to date through Tuesday’s close, well behind Dell Technologies stock, which was up 241% over the same span. The year-to-date gap tells the story of where AI server share and investor conviction have shifted in 2026.
NVIDIA (NASDAQ:NVDA) sits behind the whole complex as the GPU supplier feeding the AI systems Dell Technologies is shipping. NVIDIA stock was up 17% year to date through Tuesday’s close, a comparatively modest gain that reflects how the AI hardware trade has broadened out from chips into full-stack systems, cooling, storage, and networking (we profiled seven of these non-chip AI infrastructure suppliers in a free report here).
What to Watch The open questions against the raised guide are supply constraints on AI server components and the durability of AI server margins. Dell’s own commentary flagged that demand is exceeding available supply, and memory, wafer, and power availability remain hard ceilings across the industry. Investors can watch for whether the operating leverage that drove ISG operating income up 225% in the quarter holds as AI server mix keeps climbing.
The other question is backlog conversion. A $95 billion backlog only matters if the systems ship, and enterprise AI deployments still depend on customer power, cooling, and networking readiness. Traders may want to keep an eye on whether Dell stock holds this morning’s 9% gain through the session and how analysts reset their fiscal 2027 price targets against the new $192 billion revenue frame.
Investors should size their positions carefully here. The AI hardware trade has stretched valuations across the group, and any softening in order flow or supply commentary from NVIDIA or the hyperscalers could pressure the whole complex quickly.
Contact [email protected] for any questions or corrections.
Super Micro Computer Inc. (NASDAQ:SMCI) shares are trading higher in sympathy with Dell Technologies Inc. (NYSE:DELL), which reported second-quarter fiscal-year 2027 results yesterday after market close.
Super Micro Computer stock is gaining positive traction. What’s driving SMCI shares up? Dell Upbeat Q2 ResultsDell reported record revenue of $47.0 billion, up 58% year-over-year, with record diluted EPS of $6.34, up 273% year-over-year. The company’s Infrastructure Solutions Group posted record AI-optimized server revenue of $16.4 billion, up 100% year-over-year, on a record $60.9 billion in AI server orders and a record $95 billion backlog. Dell raised its full-year fiscal 2027 revenue guidance by $25 billion to $192.0 billion, up nearly 70% year-over-year.
Why It Matters for Super MicroDell’s results serve as a bellwether for the broader AI server market, and its record AI server bookings and backlog suggest demand for AI infrastructure remains robust heading into the back half of the year. Super Micro competes directly with Dell in the AI server hardware space, and Dell’s strong print is being read by investors as a positive read-through for industry-wide AI server demand — a dynamic that tends to lift Super Micro in sympathy on days when a close peer posts strong results.
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Super Micro Shares Trend HigherSMCI Price Action: At the time of publication, Super Micro shares are trading 2.42% higher at $37.60, according to data from Benzinga Pro.
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Daily price chart for AMD with the 50-day EMA at $481.67 and the 200-day EMA at $371.23. Source: TradingView AMD looks like it is going to be ever so slightly lower at the open according to premarket trading. $450 continues to be a major support level. And of course, again, it’s that higher rate story. The question about artificial intelligence and profitability continues to be an issue as well.
Those who are technical traders may start to look at this as a potential rounding top, and we’ll just have to wait and see how that plays out. Some traders swear by them; some traders don’t believe them. We’ll see.
But certainly some lackluster performance as of late, although we haven’t broken through major support, so there is still that as well. It’s almost like it’s been in a holding pattern. And let’s be honest here, from the end of March to the end of June, we saw a massive, more than doubling of this stock, so we have to put things in perspective.
Jim Cramer dismissed Super Micro Computer on a Monday and then had to explain its massive August gain on a Monday just six trading days later. The bear case he keeps citing never went away, so what exactly is the…
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Jim Cramer spent the last week of August 2026 arguing with himself about Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction). On August 25, during his lightning round on Mad Money, a viewer asked about the AI server maker. Cramer waved him off with a Cole Porter riff, calling the day’s gain “a short squeeze” and saying flatly, “I don’t want to own Super Micro” because “it’s got accounting problems.”
Six trading days later, closing the book on the month, he read Super Micro’s name off his list of August winners. “I don’t know how this Super Micro keeps coming back, but no matter how much heat it takes for some of its employees helping the Chinese to get NVIDIA hardware, it’s still up 31% for the month of August. The market has no memory. The authorities perhaps have no teeth,” Cramer told viewers in a CNBC segment on August 31.
What the Stock Actually Did The price data backs the recap. SMCI closed August at $36.71, and the one-month move from $28.40 on July 31 to a late-August peak put the stock up 29.26% for the month on an adjusted basis. Year to date, SMCI is up 25.42%, though the 12-month return remains negative at -11.63%.
The rally had a fundamental spark. Super Micro reported fiscal Q4 on August 11, 2026, posting revenue of $11.1 billion, up 93% year over year, and non-GAAP EPS of $1.70. Non-GAAP gross margin came in at 17.6%, versus prior guidance of 8.2% to 8.4%, a 750-basis-point sequential jump CEO Charles Liang tied to a richer enterprise mix. Management also disclosed over $60 billion in new orders during the quarter and guided fiscal 2027 revenue to $65 billion to $72 billion. You can read the full earnings report in the company’s 8-K earnings exhibit filed with the SEC.
Why Cramer’s Skepticism Isn’t Crazy The bear case Cramer keeps returning to has legs. Fiscal 2026 operating cash flow was negative $6.8 billion as inventory ballooned to $12.9 billion, the board is still reviewing transactions tied to export-control issues, and one large data center customer represented 28% of fiscal 2026 revenue. Cramer’s reference to employees allegedly helping Chinese buyers obtain NVIDIA hardware speaks to a regulatory overhang that has not gone away.
SMCI Rode a Bigger Wave Super Micro rode a broader rally. Palantir Technologies (NASDAQ:PLTR) rose 46.21% in the month after posting 93% revenue growth and a 155% Rule of 40 score, with CEO Alex Karp calling it “one of the more exciting times to be at Palantir.” Salesforce (NYSE:CRM) climbed 40.26% after Q2 revenue of $11.35 billion and AgentForce ARR reaching $1.5 billion. ServiceNow (NYSE:NOW) added 28.47% after CEO Bill McDermott announced ServiceNow AI ACV had “cross[ed] over a billion” with agentic AI production customers up 9x over the last nine months.
All four had been under pressure from a hedge fund positioning bet against AI-displacement and enterprise software names. When that positioning unwound, the same shorted names rallied together, which helps explain how a controversial name like SMCI could catch the same bid as blue-chip software. The server, power, and cooling suppliers behind the data-center buildout keep showing up on our radar too, and we rounded up seven of them in a free AI infrastructure report.
What to Watch Next SMCI trades at a P/E of roughly 11, cheap relative to Palantir at 255, but the multiple reflects real risk: customer concentration, working capital strain, and an unresolved board review. Q1 fiscal 2027 guidance calls for revenue of $14.5 billion to $15.5 billion and non-GAAP gross margin of just 10.4% to 10.8%, meaning the Q4 margin spike is not expected to repeat. Investors weighing Cramer’s whiplash should keep an eye on the stock through the next quarterly print, when the $60 billion order book starts converting into shippable revenue and the margin story gets its next real test.
Contact [email protected] for any questions or corrections.
Key Takeaways NVIDIA's Data Center revenue surged 117% year over year to $89 billion in fiscal 2027's second quarter. Super Micro Computer is benefiting from AI infrastructure demand and a large order pipeline. Semtech expects data center sales to grow 45% sequentially and 160% year over year in Q3 fiscal 2027. U.S. stock markets ended on a positive note in August after posting mixed June and July. The Dow was up more than 1%, marking its fifth consecutive monthly winning streak. The S&P 500 and the Nasdaq Composite advanced 2.6% and 3.9%, respectively.
Both the S&P 500 and the Nasdaq Composite posted their first monthly advance since May. Moreover, the Dow and the S&P 500 recorded their new all-time highs both on an intraday and closing basis, early last month.
The strong performance was primarily driven by a rejuvenated artificial intelligence (AI) trade. Consequently, we have narrowed our search to five AI-powered bigwigs with a favorable Zacks Rank that are expected to maintain their momentum in September, too.
The stocks are: NVIDIA Corp. (NVDA - Free Report) , Super Micro Computer Inc. (SMCI - Free Report) , Semtech Corp. (SMTC - Free Report) , SiTime Corp. (SITM - Free Report) and Keysight Technologies Inc. (KEYS - Free Report) . Each of the stocks currently sports a Zacks Rank #1 (Strong Buy) and has a Zacks Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
NVIDIA Corp.NVIDIA continues to benefit from broad demand for accelerated computing as customers build AI factories across hyperscalers, AI clouds, enterprises and sovereign buyers. Blackwell Ultra is supporting growth while Vera Rubin broadens the platform across GPUs, CPUs, networking and software.
NVDA’s Data Center revenues reached $89 billion in the second quarter of fiscal 2027, up 117% year over year and 18% sequentially. Hyperscale revenues totaled $48.7 billion, up 102% year over year, while ACIE revenues amounted to $40.3 billion, up 138%, showing growth across large clouds and AI clouds, enterprises and sovereign buyers.
Networking also reached another record quarter, with revenues rising 18% sequentially and Spectrum-X Ethernet revenues growing 2.6 times year over year. NVDA expects NeoCloud partners to exit fiscal 2027 with eight gigawatts of installed capacity versus about three gigawatts at the end of 2025.
NVDA’s product cadence remains a key differentiator as customers focus on token economics, throughput and power efficiency. Vera Rubin entered production shipments in August 2026 after NVIDIA received purchase orders from every major hyperscaler, AI cloud and system OEM.
The company noted that Rubin delivers 30 times higher throughput per megawatt and 35 times lower token cost than Grace Blackwell Ultra, while raising NVIDIA’s revenue opportunity per gigawatt to about $40 billion from $25 billion with Blackwell.
The platform now spans Vera CPU, Rubin GPU, NVLink, InfiniBand or Ethernet and Groq LPU. Vera CPU is also in full production, and management preliminarily expects CPU revenues to more than double in fiscal 2028. This cadence can extend upgrade cycles as customers plan successive generations of AI factories.
NVIDIA has an expected revenue and earnings growth rate of 85.4% and 93.3%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 3.4% in the last seven days.
Super Micro Computer Inc.Super Micro Computer remains positioned to benefit from expanding AI infrastructure demand, supported by rapid adoption of new GPU platforms, its modular Building Block architecture, liquid-cooling expertise and a broader DCBBS offering.
SMCI’s record fiscal 2026 revenue and a large order pipeline support management’s fiscal 2027 sales outlook. A richer enterprise mix and more software and service content could also support profitability over time.
SMCI continues to emphasize early availability of new AI systems as a competitive advantage. In fourth-quarter fiscal 2026, the company was shipping volume products across NVIDIA’s GB300 NVL72, HGX B300, B200 NVL4 and RTX 6000 Pro lines. SMCI is also preparing systems based on NVIDIA Vera Rubin and Vera CPU platforms.
With Advanced Micro Devices, SMCI launched the Helios product line and MI450 Total Solution while continuing to support MI350 and MI355X systems. Intel Xeon 6+ platforms are shipping in volume, and the company is developing systems for Arm-based AGI processors.
Super Micro Computer has an expected revenue and earnings growth rate of 71.8% and 22%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 30.3% in the last 30 days.
Semtech Corp.Semtech is benefiting from rising AI data center networking demand as 800G remains active and 1.6T FiberEdge and CopperEdge ramps broaden its content opportunity. LoRa is extending across industrial, smart-home and mass-market consumer applications, while premium-device protection and sensing add another growth avenue.
Portfolio optimization and photonics expansion should support a higher-margin mix, and cash generation is funding capacity and product investment. SMTC’s data center business is scaling as 800G demand is complemented by 1.6T FiberEdge and CopperEdge ramps.
In second-quarter fiscal 2027, data center net sales reached a record $100 million, up 39% sequentially and 91% year over year. FiberEdge TIA and driver solutions are designed into every major module provider in the company’s target markets, with some sole-source positions.
SMTC expects 1.6T FiberEdge market share to exceed 50% by fiscal 2027-end, while CopperEdge is already capturing the majority of the linear equalizer market. For third-quarter fiscal 2027, management projects data center sales growth of 45% sequentially and 160% year over year, with momentum expected to continue through fiscal 2028.
Semtech has an expected revenue and earnings growth rate of 41.5% and 94.7%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 25.2% in the last seven days.
SiTime Corp.SiTime is benefiting from sustained demand for precision timing across AI infrastructure, where higher bandwidth, synchronization needs and rising timing density are expanding content per system.
The Renesas timing acquisition broadens SITM’s clock portfolio, customer reach and exposure to data center and industrial markets, while product mix and manufacturing absorption are supporting higher profitability.
The combined platform also expands SITM’s addressable opportunity across integrated timing, automotive, defense and personal AI devices. Improving visibility, expanding design opportunities and operating leverage support SITM’s long-term growth prospects.
SiTime has an expected revenue and earnings growth rate of more than 100% each, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 38.9% in the last 30 days.
Keysight Technologies Inc.Keysight Technologies is benefiting from growing customer investments in advanced node, memory and silicon photonics. KEYS has secured wafer test solution wins supporting silicon photonics and advanced node programs across Asia, the United States and Europe.
KEYS continues to convert growth into cash, which supports product investment, acquisitions and shareholder returns. An expanding software and services mix, recurring revenue streams and leadership in 5G, 6G and network technologies strengthen KEYS’ competitive position.
Focus on product diversification and expansion into aerospace, defense and the automotive market is a positive. KEYS is benefiting from customer investments in advanced node, memory and silicon photonics, while expanding software and services.
KEYS cited key wafer test solution wins supporting silicon photonics and advanced node programs across Asia, the United States and Europe, and said lithography-related solutions grew during the second quarter of fiscal 2026.
Keysight Technologies has an expected revenue and earnings growth rate of 32.2% and 56.8%, respectively, for the current year (ending October 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 9% in the last 30 days.
Super Micro Computer Investigation Initiated: Kahn Swick & Foti, LLC Investigates the Officers and Directors of Super Micro Computer, Inc. - SMCI Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Super Micro Computer, Inc. (“Super Micro” or the “Company”) (NasdaqGS: SMCI).
On March 19, 2026, post-market, the U.S. Department of Justice announced the unsealing of an indictment against three individuals associated with the Company, Yih-Shyan Liaw (the Company’s co-founder, director, and Senior Vice President of Business Development), Ruei-Tsang Chang (“a general manager in the [Super Micro’s] Taiwan office),” and Ting-Wei Sun (“a third-party broker and fixer”), for engaging in a “scheme to divert massive quantities of servers housing U.S. artificial intelligence technology to customers in China” violating U.S. export control laws, in order to “drive sales and generate revenues in violation of U.S. law” and enabled the sale of “approximately $2.5 billion worth of servers” between 2024 and 2025.
Thereafter, the Company and certain of its executives were sued in a securities class action lawsuit, charging them with failing to disclose material information during the Class Period in violation of federal securities laws, which remains ongoing.
KSF’s investigation is focusing on whether Super Micro’s officers and/or directors breached their fiduciary duties to its shareholders or otherwise violated state or federal laws.
If you have information that would assist KSF in its investigation, or have been a long-term holder of Super Micro shares and would like to discuss your legal rights, you may, without obligation or cost to you, call toll-free at 1-833-538-3606 or email KSF Managing Partner Lewis Kahn ([email protected]), or visit https://ksfcounsel.com/cases/nasdaqgs-smci/ to learn more.
About Kahn Swick & Foti, LLC
KSF, whose partners include former Louisiana Attorney General Charles C. Foti, Jr., is one of the nation’s premier boutique securities litigation law firms. This past year, KSF was ranked by SCAS among the top 10 firms nationally based upon total settlement value. KSF serves a variety of clients, including public and private institutional investors, and retail investors - in seeking recoveries for investment losses emanating from corporate fraud or malfeasance by publicly traded companies. KSF has offices in New York, Delaware, California, Louisiana, Chicago, and a representative office in Luxembourg.
TOP 10 Plaintiff Law Firms - According to ISS Securities Class Action Services
To learn more about KSF, you may visit www.ksfcounsel.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260831189520/en/
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
NEW YORK & NEW ORLEANS--(BUSINESS WIRE)--Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Super Micro Computer, Inc. (“Super Micro” or the “Company”) (NasdaqGS: SMCI).On March 19, 2026, post-market, the U.S. Department of Justice announced the unsealing of an indictment against three individuals associated with the Company, Yih-Shyan Liaw (the Company's co-foun.
From a technical perspective, Super Micro Computer, Inc. (SMCI - Free Report) is looking like an interesting pick, as it just reached a key level of support. SMCI's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world.
Considered an important signifier for a bullish breakout, a golden cross is a technical chart pattern that's formed when a stock's short-term moving average breaks above a longer-term moving average; the most common crossover involves the 50-day and the 200-day, since bigger time periods tend to form stronger breakouts.
A successful golden cross event has three stages. It first begins when a stock's price on the decline bottoms out. Then, its shorter moving average crosses above its longer moving average, triggering a positive trend reversal. The third and final phase occurs when the stock maintains its upward momentum.
A golden cross contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.
Over the past four weeks, SMCI has gained 30.6%. The company currently sits at a #1 (Strong Buy) on the Zacks Rank, also indicating that the stock could be poised for a breakout.
Looking at SMCI's earnings expectations, investors will be even more convinced of the bullish uptrend. For the current quarter, there have been 7 changes higher compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.
Investors should think about putting SMCIon their watchlist given the ultra-important technical indicator and positive move in earnings estimates.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
A Taiwanese indictment named individuals tied to Super Micro and NVIDIA, but whether the companies themselves face liability depends on a legal distinction that sent one stock soaring 8% while the broader tech tape went nowhere.
The AI server complex is rebounding Tuesday morning after a Taiwanese indictment landed narrowly on individuals rather than the corporate parents behind them. That distinction is the entire story on Tuesday. It lifted the names most exposed to the legal overhang first and left the broader tech tape mixed.
Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction) stock is up 8% to $37.88 as the corporate cloud lifts on Tuesday morning. It was up 20% year to date through Monday’s close, so the move builds on an already improving trend. Also climbing, Dell Technologies (NYSE:DELL) stock is up 4% to $452.01, still riding a 247% year-to-date gain through Monday’s close on relentless AI-optimized server demand.
For context, the iShares Semiconductor ETF (NASDAQ:SOXX) is up 1% to $513.23. Meanwhile, the iShares Expanded Tech-Software Sector ETF (CBOE:IGV) is down 0.2% to $102.30. That split confirms the rebound is a hardware-led move on legal clarity, not a broad software or tech rally.
Taiwan Indictment Hits People, Not Companies On Monday, August 24, prosecutors in the Taiwanese port city of Keelung indicted nine people over the illegal export of high-end AI servers to China. Eight of the nine, including one employee of NVIDIA‘s (NASDAQ:NVDA) Taiwan unit and two employees of Super Micro Computer’s Taiwan subsidiary, were charged with breach of trust and document forgery. Three defendants were charged with embezzlement.
Prosecutors said 50 of the servers were transshipped through Indonesia, eight were sent via Japan, and the rest went directly to China, while another 56 servers were seized at Taiwan’s border. Super Micro Computer said its own cooperation with authorities led to the arrests and that “The Company continues to cooperate with Taiwan authorities, is not a target of their investigation and has not been accused of any wrongdoing.” That removal of a perceived corporate-liability overhang is the catalyst behind Tuesday’s move.
Why Super Micro Rebounded Harder Than Dell Super Micro Computer carried the direct legal exposure into Tuesday because two of its Taiwan subsidiary’s former employees were named. Furthermore, it had the largest overhang to unwind, which is why the stock produced the larger rebound. Prosecutors are seeking sentences of up to five years for seven defendants they said were “driven by the pursuit of exorbitant profits,” and more lenient terms for the two who cooperated.
Dell Technologies had no employees named in the indictment. Its 4% move is a read-across to AI server demand rather than any company-specific legal development. Hewlett Packard Enterprise sits in the same server bucket as a peer, and the broad iShares U.S. Technology ETF holds all three server vendors alongside NVIDIA.
Notably, exporting restricted chips to China is not itself a criminal offense under Taiwanese law, so prosecutors relied on breach of trust, forgery and embezzlement statutes instead. That framing keeps the matter tied to individual conduct rather than corporate policy. It is why Super Micro Computer stock and Dell Technologies stock can both trade higher on the same set of headlines.
What to Watch Into NVIDIA’s Report The rebound reflects the removal of a legal overhang and offers no fresh information on AI server demand, margins, or backlog. NVIDIA reports fiscal Q3 2026 results after the close on August 26, a company-confirmed date, and AI server names frequently trade with that report. Dell Technologies follows with its own fiscal Q3 2026 results after the close on September 1, also company-confirmed.
Investors can watch for whether Super Micro Computer holds Tuesday’s gains into the close and whether the NVIDIA report reprices the AI server group later this week. Given how quickly SMCI stock has swung on legal headlines this year, investors should consider keeping their position sizes modest in the name even if they are constructive on the broader AI infrastructure thesis.
Moreover, traders may want to keep an eye on whether Dell Technologies stock continues to lead on demand read-through, or whether the rally broadens out to include Hewlett Packard Enterprise and other server names once NVIDIA reports. The Taiwan case can keep advancing on its own timetable, and any further legal or regulatory clarifications remain a live source of headline risk for Super Micro Computer. For readers focused on the buildout rather than the headline, we mapped seven picks-and-shovels names powering AI data centers in a free report here.
Contact [email protected] for any questions or corrections.
Key Takeaways SMCI ended fiscal 2026 with a record backlog after receiving over $60 billion in new orders.SMCI expects AI-related solutions to exceed 80% of revenues, supported by demand across major AI workloads.Support for NVIDIA, AMD and Intel platforms positions SMCI for successive AI system transitions. Super Micro Computer’s (SMCI - Free Report) exposure to AI infrastructure remains a central growth driver. Fiscal 2026 revenues rose 78% to $39.1 billion, and management said more than $60 billion of new orders were received in the fourth quarter, leaving a record backlog heading into fiscal 2027.
The AI solutions represented about 60% of SMCI’s fourth-quarter fiscal 2026 revenues because several large projects shifted timing, but management expects AI-related solutions to exceed 80% of revenues going forward based on backlog. The company guided for fiscal 2027 sales of $65 billion to $72 billion and first-quarter sales of $14.5 billion to $15.5 billion.
Demand for AI training, inference, NeoCloud and sovereign deployments remains the primary driver of Super Micro Computer’s longer-term expansion. Super Micro Computer continues to emphasize early availability of new AI systems integrated with NVIDIA, Advanced Micro Devices and Intel chips as a competitive advantage.
In fourth-quarter fiscal 2026, the company was shipping volume products across NVIDIA’s GB300 NVL72, HGX B300, B200 NVL4 and RTX 6000 Pro lines. It is also preparing systems based on NVIDIA Vera Rubin and Vera CPU platforms. With AMD, SMCI launched the Helios product line and MI450 Total Solution while continuing to support MI350 and MI355X systems.
Intel Xeon 6+ platforms are shipping in volume, and the company is developing systems for Arm-based AGI processors. Broad support across multiple processor ecosystems gives customers more deployment choices and can help the company participate in successive AI platform transitions.
How Competitors Fare Against SMCIBig players like Dell Technologies (DELL - Free Report) and Hewlett Packard Enterprise (HPE - Free Report) are competing with SMCI in this space.
Dell Technologies is a major supplier of servers and storage systems, with a broad customer base across enterprises and cloud providers. Its scale, established distribution and service offerings give it an edge in winning large contracts. Hewlett Packard Enterprise is also expanding aggressively into AI and high-performance computing.
HPE’s GreenLake platform provides customers with flexible, cloud-like consumption models, which can be attractive to enterprises. Hewlett Packard Enterprise’s focus on hybrid cloud and AI workloads positions it as a direct competitor in areas where SMCI is seeking growth through its DCBBS strategy.
SMCI’s Price Performance, Valuation and EstimatesShares of Super Micro Computer have gained 20.1% year to date compared with the Zacks Computer – Storage Devices industry’s growth of 211.5%.
SMCI YTD Performance Chart
Image Source: Zacks Investment Research
From a valuation standpoint, SMCI is trading at a discount at a forward 12 Month P/S multiple of 0.32X compared with industry’s P/S multiple of 2.82X.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 22% and 18.7%, respectively. Estimates for fiscal 2026 and 2027 earnings have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Super Micro Computer currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Supermicro secured over $60 billion in new orders, with roughly 70% tied directly to AI infrastructure demand. FY2027 revenue guidance of $65 billion to $72 billion materially exceeded the previous consensus of roughly $54.4 billion. Q4 gross margin surged to 17.6%, but management guides 10.4% to 10.8% as favorable mix benefits normalize.
Shares of AI server-maker Super Micro Computer (SMCI -3.59%) rallied 9.4% on Tuesday. The company received a big boost in confidence as enterprise data center infrastructure giant Cisco (CSCO -1.98%) announced it would partner with the server maker on liquid-cooled, rack-scale AI solutions.
That validation is especially valuable for Super Micro, which has long been at the forefront of server technology but has more recently garnered skepticism over corporate governance issues.
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Cisco gives a super stamp of approval It should be noted that today's big jump clawed back the significant decline in Super Micro's stock yesterday. On top of Monday being a tough day for the overall AI semiconductor sector, Super Micro's stock fell especially hard after Taiwanese Authorities indicted two Super Micro employees for attempting to redirect Super Micro AI servers to China, in violation of U.S. export restrictions. Super Micro employees weren't the only ones involved; the indictments targeted nine individuals, including one Nvidia (NVDA -4.58%) employee.
The recent indictments follow accusations that Super Micro has been playing fast and loose on other issues, including accounting compliance and corporate governance, since mid-2024.
Super Micro appears to have put most issues behind it, having secured a new auditor who signed off on its books in 2025. Furthermore, Super Micro noted that it was not a defendant in the recent server-smuggling scheme and that it has been working with authorities to help stop third-party smuggling.
Nevertheless, the "smoke" from all these issues appears to have made many investors cautious about Super Micro shares, which trade at a big discount to peers despite a recent massive earnings beat and strong forward guidance.
That's perhaps why Cisco's "seal of approval," so to speak, carries so much weight today. According to today's press release, Cisco is adding Super Micro's liquid-cooled Nvidia AI racks to its Secure AI Factory architecture portfolio, an approved list of AI solutions built with Cisco's secure compliance approval.
Cisco is a giant, longtime infrastructure provider to the biggest enterprises in the world, so its adding Super Micro liquid-cooled racks to its approved product list carries a lot of weight in validating Super Micro's technology, time-to-market execution, and compliance bona fides.
Image source: Getty Images.
Super Micro remains a cheap way to play AI growth Super Micro trades at a massive discount to peers such as Dell Technologies (DELL -3.39%), despite both being AI server producers and each having similar growth profiles.
SMCI PE Ratio (Forward) data by YCharts
No doubt, concerns over Super Micro's governance play a large role in this yawning discount; however, today's announcement shows Super Micro remains a go-to hardware provider for the biggest companies in AI infrastructure. If you feel comfortable that the corporate governance concerns are overblown, the stock looks like a massive bargain and the cheapest way to play the AI boom -- of course, that's a big "if."
Super Micro Computer just secured a record-breaking backlog and guided to $72 billion in revenue, yet shares sit nearly 20% below where they traded a year ago. Something has to give, and the timeline for a resolution is closer than…
Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction) just booked over $60 billion in new orders in a single quarter and guided fiscal 2027 revenue to $65 billion to $72 billion. Yet shares sit at just $38.17, up only 20.16% YTD and still down 19.85% over the past year. The disconnect is striking. So the question I want to answer: can SMCI actually hit $60 in 2027?
Why SMCI Shares Are Stuck Despite a Record Backlog The market has trust issues with this name. Shares are down 8.12% in the past week alone, and the Q4 top line came in near the low end of guidance, which management pinned on “delays in customer readiness” tied to power, cooling, and networking.
Add in a lingering board independent review on export-control matters, 28% revenue concentration in a single hyperscaler, and inventory that ballooned to $12.9 billion. This is why the multiple stays compressed. A beta of 1.967 means every whiff of bad news moves the stock harder than the broader market. Investors want proof that big backlog converts into clean, high-margin revenue.
Wall Street Sees Modest Upside. I Think They’re Too Cautious The consensus analyst target is $42.38, with ratings split at 2 strong buy, 3 buy, 11 hold, 2 sell, and 1 strong sell. That is a hold-flavored book. Our internal model pegs the one-year base case at $44.58, an upside of 16.91%, with a bull case of $50.60 and confidence of 0.9.
Analysts are anchoring to Q3’s messy 9.9% gross margin and last year’s guidance cuts. They are underweighting 409.4% YoY earnings growth and a bullish sentiment split of 26 bullish vs 16 bearish. Consensus is fighting the last war.
Here’s What It Takes for SMCI to Reach $60 Reaching $60 from today’s price of $38.17 would require a gain of 57.2%. With forward EPS of $3.94, a price of $60 implies a forward P/E of 15x. Our base case of $44.58 already implies 11x, meaning the bold target requires 5x of additional multiple expansion. That is doable if fiscal 2027 EPS drives ahead of the forward figure.
Q4 non-GAAP gross margin already snapped back to 17.6% from 10.1% in Q3, and enterprise revenue jumped 172% YoY. CEO Charles Liang said, “Looking to fiscal year 2027, our momentum gives us strong confidence to target our revenue in the range of $65 billion to $72 billion.” The primary risk is the board inquiry outcome and any restatement pressure.
Where SMCI Trades Today vs Its Earnings Power At $38.17 against forward EPS of $3.94, SMCI trades at a forward P/E near 10x. That is cheap for a company printing 93.2% YoY revenue growth and a 21.5% return on equity.
Shares sit between the $19.48 52-week low and $58.78 52-week high, well below their prior peak. Ten-year returns of 1,545.77% remind you what this platform can do when execution lines up.
Is $60 Realistic? Here’s My Take Reaching $60 requires a 57.2% gain and a rerating to roughly 15x forward earnings. That is a stretch, but not a fantasy.
Three things need to go right: fiscal 2027 revenue lands near the top of the $72 billion range, gross margin stabilizes above 12%, and the board review closes cleanly. A serious export-control finding would derail the entire setup. Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Super Micro Computer could reach $60 in 2027.
Contact [email protected] for any questions or corrections.
Investors interested in Computer- Storage Devices stocks are likely familiar with Super Micro Computer (SMCI - Free Report) and NetApp (NTAP - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Super Micro Computer and NetApp are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that SMCI likely has seen a stronger improvement to its earnings outlook than NTAP has recently. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
SMCI currently has a forward P/E ratio of 8.68, while NTAP has a forward P/E of 20.77. We also note that SMCI has a PEG ratio of 0.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NTAP currently has a PEG ratio of 2.72.
Another notable valuation metric for SMCI is its P/B ratio of 2.26. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NTAP has a P/B of 27.18.
These are just a few of the metrics contributing to SMCI's Value grade of B and NTAP's Value grade of D.
SMCI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SMCI is likely the superior value option right now.
SMCI weekly chart shows signs of strength within long-term bearish correction. Source: TradingView Nonetheless, a sustained recovery above $51.40 would also confirm a breakout above the long-term downtrend line that has defined the full bearish correction following the 2024 peak of $122.90. Two bullish patterns have followed the March correction low of $19.48, showing that buyers are regaining control. The recent pattern breakouts also support the potential completion of the long-term bearish correction. Once complete, the long-term bull trend could be positioned to reassert itself more clearly. For now, $51.40 remains an important level for confirming that transition.
$55.30 Offers an Initial Pattern Target The dominant pattern developing looks to be a rising ABCD pattern that begins from the March low. On the weekly chart, the pattern projects an initial 100% target near $55.30. That is where the advance seen in the second leg up, starting with point C, will match the price change in the first leg up. Once that occurs, a potential pivot level is indicated.
Since that initial upside target from the developing pattern is above the June swing high, it may have a somewhat greater chance of being recovered. The recent flag breakout therefore provides a near-term catalyst, while a move above $51.40 would offer stronger confirmation of the larger bullish reversal. Together, those developments could determine whether SMCI can extend its recovery toward the $55.30 objective and further challenge the long-term bearish structure that began at $122.90.
Super Micro Computer delivered a strong Q4 with revenue up 93% YoY and a dramatic margin rebound, but cash flow remains a major concern. Fiscal 2027 revenue guidance is highly bullish, targeting 66–84% growth, yet Q1 EPS guidance signals margin normalization and significant dilution. Despite robust growth and an order backlog, SMCI's persistent negative free cash flow and governance issues justify a buy rating, not a strong buy.
Super Micro Computer, Inc. (NASDAQ:SMCI) stock gained over 3% on Thursday as NVIDIA Corp.’s (NASDAQ:NVDA) latest earnings reinforced optimism around AI infrastructure demand, while S&P 500 futures rose 0.50%.
Nvidia and Supermicro are closely linked through AI infrastructure. Nvidia supplies GPUs, networking chips and AI software, while Supermicro integrates those technologies into high-performance servers, racks and cooling systems.
Supermicro is also often among the first hardware vendors to deploy new Nvidia architectures, making it an important partner in bringing Nvidia-powered AI systems into data centers.
Nvidia Results Keep AI Hardware Demand In FocusNvidia stock jumped more than 7% premarket after reporting second-quarter revenue of $96.22 billion, beating the $92.18 billion estimate. Adjusted EPS of $2.22 also topped the $2.10 estimate, while gross margin reached 75.0%.
The results kept AI hardware stocks such as Super Micro in focus as investors reacted to Nvidia’s latest AI-demand commentary.
Nvidia also guided third-quarter revenue to between $105.84 billion and $110.16 billion and ended the quarter with $99.0 billion remaining under its share repurchase authorization.
Analyst Consensus & Recent Actions: Super Micro stock carries a Hold rating with an average price forecast of $36.20. Recent analyst moves include:
Citigroup: Neutral (Raises Forecast to $39.00) (Aug. 12) Goldman Sachs: Sell (Raises Forecast to $34.00) (Aug. 12) Mizuho: Neutral (Raises Forecast to $35.00) (Aug. 12) Top ETF Exposure iShares Future AI & Tech ETF (NYSE:ARTY): 3.46% Weight VanEck Preferred Securities ex Financials ETF (NYSE:PFXF): 4.10% Weight Defiance Daily Target 2X Long SMCI ETF (NASDAQ:SMCX): 26.74% Weight Significance: Because SMCI carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
SMCI Price Action: Super Micro Computer shares were up 2.70% to $38.39 at the time of publication on Thursday, according to Benzinga Pro data.
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On August 24, 2026, Super Micro Computer Inc
SMCI -5.56% 83
shares fell 5.6% to a current price of $35.17, reflecting a range between $19.48 and $58.78 over the past year. This significant decline today is noteworthy as it comes amidst a year where the stock has seen a year-to-date increase of 20.2% and a one-month increase of 16.8%.
GF Value™ verdict: Current price $35.17 vs GF Value $81.74, implying a 57.0% upside. GF Score™: 83/100, indicating strong overall performance. Most notable signal: Insiders have sold $5.6M worth of shares over the past 12 months, with no buying activity. Is SMCI Overvalued or Undervalued? Super Micro Computer Inc
SMCI -5.56% 83
is currently trading at a price of $35.17, which is significantly lower than its GF Value™ estimate of $81.74. This difference suggests that the stock is undervalued by approximately 57.0%. However, it's important to note that this GF Value™ estimate, which is derived from a combination of historical trading multiples, past business growth, and future performance projections, may not be a reliable indicator for a company that is currently unprofitable or cash-flow-negative.
The GF Valuation label indicates that SMCI may represent a possible value trap, which means that while the current price appears attractive, the underlying fundamentals may not support a rebound to the estimated fair value. Therefore, while there may be an opportunity for investors, caution is advised as the earnings-based valuation methods, such as Price-to-Earnings (P/E), may not apply effectively given the company’s financial situation.
How Does SMCI's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 11.0x 19.3x Forward P/E 8.2x N/A SMCI's current P/E (TTM) of 11.0x is significantly below its 5-year median P/E of 19.3x and its forward P/E of 8.2x. This P/E analysis aligns with the GF Value™ verdict, suggesting that the stock is undervalued based on historical earnings multiples. However, given the company’s current financial challenges, reliance on P/E ratios alone may be misleading.
What Does SMCI's GF Score™ Tell Us? The GF Score™ assesses a stock's overall performance based on various factors, including financial strength, profitability, growth potential, valuation, and momentum. SMCI scores 83/100, indicating strong performance overall, particularly in terms of growth.
Metric Rating GF Score™ 83 Financial Strength 7/10 Profitability 8/10 Growth 10/10 Valuation 2/10 Momentum 5/10 SMCI's strongest area is its growth rank of 10/10, indicating robust growth potential, while its valuation rank of 2/10 suggests significant concerns regarding its current price in relation to its earnings. The relatively strong financial strength and profitability ranks also indicate that while the company may be struggling with profitability currently, it possesses some solid fundamentals.
What Are Gurus and Insiders Doing with SMCI? Currently, 8 gurus hold Super Micro Computer Inc
SMCI -5.56% 83
shares, with 7 increasing their positions and 2 trimming their holdings in recent quarters. This indicates a generally positive outlook among these investment professionals. However, insider activity presents a contrasting signal, as insiders sold $5.6 million worth of shares over the past year without any buying activity, which raises concerns about management's confidence in the company's future performance.
The divergence between guru activity and insider selling could suggest that while external investors are optimistic, those within the company may have reservations about its prospects, which investors should consider when assessing the stock.
What This Means for Investors Based on the information presented, Super Micro Computer Inc
SMCI -5.56% 83
appears to be undervalued according to the GF Value™ metric, but with significant caveats due to its current unprofitability and the potential for being a value trap. Investors may find opportunities here, but they should proceed with caution given the mixed signals from both insider activity and the company's financial health.
For more detailed insights, visit the Super Micro Computer Inc
SMCI -5.56% 83
stock page and explore further analysis on the GF Value™ page.
Frequently Asked Questions What is SMCI's GF Score™?
The GF Score™ for SMCI is 83/100, indicating a strong overall performance across key metrics.
Is SMCI overvalued or undervalued?
SMCI is currently undervalued based on the GF Value™ estimate, which suggests significant upside potential from the current price.
What is SMCI's P/E ratio?
SMCI's P/E ratio is 11.0x, which is substantially below its historical median of 19.3x, indicating it is trading at a lower valuation compared to its past.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Taiwan prosecutors said on Monday they indicted nine people, including employees of Nvidia (NVDA.O) and Super Micro (SMCI.O), accused of illegal export of artificial intelligence servers to China.
Semiconductor powerhouse Taiwan is the world's largest producer of advanced chips used in AI applications. Prosecutors this year investigated the suspected illegal export of servers equipped with Nvidia chips subject to U.S. export controls.
Washington has imposed curbs since 2022 making it illegal for such semiconductors to be exported or sold in China.
In a statement, the prosecutors in the northern port city of Keelung said the defendants, whose full names they did not state, were "fully aware" that both Nvidia and Super Micro have "rigorous internal control procedures" regarding exports.
However, the defendants "colluded with one another at various levels for enormous profit, illegally exporting high-end servers, increasing corporate compliance costs, and severely damaging our nation's international image", they added.
Neither Nvidia nor Super Micro immediately responded to requests for comment.
Taiwan has tightened export controls in recent years to keep advanced technology and know-how from reaching China, which claims the democratically governed island as its own territory despite the strong objections of the island's government.
Super Micro Computer (SMCI - Free Report) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
The upward trend in estimate revisions for this server technology company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Super Micro Computer, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate RevisionsThe company is expected to earn $1.06 per share for the current quarter, which represents a year-over-year change of +202.9%.
Over the last 30 days, the Zacks Consensus Estimate for Super Micro has increased 80.61% because five estimates have moved higher compared to no negative revisions.
Current-Year Estimate RevisionsThe company is expected to earn $4.43 per share for the full year, which represents a change of +22.0% from the prior-year number.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, seven estimates have moved up for Super Micro versus no negative revisions. This has pushed the consensus estimate 52.18% higher.
Favorable Zacks RankThanks to promising estimate revisions, Super Micro currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom LineInvestors have been betting on Super Micro because of its solid estimate revisions, as evident from the stock's 17% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.
Here are three stocks with buy rank and strong value characteristics for investors to consider today, August 21:
Mercury General Corporation (MCY - Free Report) : This automobile-focused property and casualty insurer from the United States carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 12% over the last 60 days.
Mercury General has a price-to-earnings ratio (P/E) of 8.18, compared with 22.95 for the S&P 500. The company possesses a Value Score of A.
Super Micro Computer, Inc. (SMCI - Free Report) : This server and storage solutions business carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 9.3% over the last 60 days.
Super Micro Computer has a price-to-earnings ratio (P/E) of 10.38, compared with 22.95 for the S&P 500. The company possesses a Value Score of B.
UnitedHealth Group Incorporated (UNH - Free Report) : This healthcare company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 7.5% over the last 60 days.
UnitedHealth has a price-to-earnings ratio (P/E) of 19.74, compared with 22.95 for the S&P 500. The company possesses a Value Score of B.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Learn more about the Value score and how it is calculated here.
Super Micro Computer, Inc.'s strong fiscal Q4 results and FY 2027 guidance reaffirm robust AI infrastructure demand, but longstanding concerns over earnings scalability remain unresolved. Normalizing for deferred fiscal Q4 contracts reflects a more moderate fiscal Q1 growth trajectory, while gross margins are expected to reset sharply. SMCI's increasing AI sales mix also heightens its exposure to rising component costs, with resulting pressure on margins and working capital risking incremental reliance on external financing and potential dilution.
Super Micro Computer, Inc. (NASDAQ: SMCI) (“Supermicro” or the “Company”) today announced the completion of the internal investigation led by the Company’s independent members of the Board of Directors regarding the March 2026 indictment of three individuals who were associated with the Company at that time.
As previously disclosed, Supermicro was informed on March 19, 2026 that two employees and a contractor were indicted in connection with an alleged conspiracy to commit export-control violations. Supermicro was not named as a defendant in the indictment and is not accused of any wrongdoing. The Company took swift action, and the three individuals no longer have any relationship with Supermicro.
The investigation was led by Scott Angel, the Company’s Lead Independent Director, and Tally Liu, Chair of the Board’s Audit Committee, and was conducted by Munger, Tolles & Olson LLP, which engaged AlixPartners, LLP, as an independent forensic accounting consultant (collectively, the “Independent Advisors”). The results of the investigation were reported to the independent members of the Board and to the entire Board.
The investigation team reviewed the customer transactions that were the subject of the federal indictment, as well as transactions with a selection of other customers who bought restricted products, and did not find any evidence that any current member of senior management had knowledge of the alleged diversion scheme or of any actual diversion of restricted products by the Company. Nor did the investigation find that the Company directly sold export-controlled products to known restricted parties or locations. It also did not find any evidence that the Company’s previously issued financial statements could not be relied upon based on the potential diversion of restricted products. The Company developed and maintained its export compliance program as its sales of restricted products increased during the period under review. The Company’s compliance personnel have acted in good faith, with the support of management, to mitigate the risk of the Company’s products subject to export controls being diverted to restricted parties or locations.
In connection with the investigation, the Company took several personnel actions with respect to employees within its sales, technical support and business development functions, including terminations, for failure to follow Company policies or the Company’s code of conduct.
With the assistance of the Independent Advisors, the independent directors also made recommendations to further enhance the Company’s export compliance program. The Board has adopted those recommendations in full. The Company has already implemented certain recommendations as a result of an internal review overseen by the General Counsel and the Chief Compliance Officer. The independent directors will oversee implementation of the remaining recommendations.
“We are pleased to report the conclusion of this independent investigation,” said Mr. Angel. “The independent directors support the actions the Company has already taken to bolster its internal policies and procedures, as well as the additional enhancements that will be implemented.”
Supermicro will continue working to combat the industry-wide challenge of diversion and remain committed to upholding the highest standards of compliance. In addition, the Company continues to cooperate with relevant government authorities in connection with their ongoing investigations.
About Super Micro Computer, Inc.
Supermicro (NASDAQ: SMCI) is a global leader in Application-Optimized Total IT Solutions. Founded and operating in San Jose, California, Supermicro is committed to delivering first-to-market innovation for Enterprise, Cloud, AI, and 5G/Edge IT Infrastructure. We are a Total IT Solutions provider with server, AI, storage, IoT, switch systems, software, and support services. Supermicro's motherboard, power, and chassis design expertise further enables our development and production, enabling next-generation innovation from cloud to edge for our global customers. Our products are designed and manufactured in-house (in the U.S., Taiwan, and the Netherlands), leveraging global operations for scale and efficiency and optimized to improve TCO and reduce environmental impact (Green Computing). The award-winning portfolio of Server Building Block Solutions® allows customers to optimize for their exact workload and application by selecting from a broad family of systems built from our flexible and reusable building blocks that support a comprehensive set of form factors, processors, memory, GPUs, storage, networking, power, and cooling solutions (air-conditioned, free air cooling or liquid cooling).
Supermicro, Server Building Block Solutions, and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc. All other brands, names, and trademarks are the property of their respective owners.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260820294441/en/
Index Dow Jones -0,72 % na 53080,36 b., S&P 500 -0,34 % na 7681,52 b., Nasdaq Composite -0,66 % na 26156,38 b.
Americké akcie otevírají čtvrteční obchodování negativně. Výsledková sezona stále pokračuje, její intenzita však již výrazně slábne. Tento týden reportuje pouze 12 společností z indexu S&P 500, přičemž většina z nich už výsledky zveřejnila.
Akcie Walmartu klesají o 8,9 % poté, co srovnatelné tržby amerických prodejen zaostaly za očekáváním trhu. Walmart US vykázal růst srovnatelných tržeb bez pohonných hmot o 2,6 %, zatímco analytici očekávali růst o 3,67 %. Tržby společnosti meziročně vzrostly o 5,9 % na 187,94 mld. USD a překonaly konsensus 186,87 mld. USD, očištěný zisk na akcii ve výši 0,81 USD rovněž překonal očekávání 0,74 USD. Společnost zvýšila celoroční výhled očištěného zisku na akcii na 2,80 až 2,87 USD z předchozích 2,75 až 2,85 USD, konsensus analytiků však činil 2,90 USD. Pro 3Q Walmart očekává očištěný zisk na akcii 0,62 až 0,64 USD oproti očekávání trhu 0,68 USD. Analytici upozorňují především na slabší dynamiku srovnatelných tržeb v USA a mírnější než očekávané zvýšení celoročního výhledu.
Akcie Deere & Co posilují o 4,2 % poté, co výrobce a distributor zemědělské techniky reportoval výsledky za 3Q nad očekáváním a zvýšil spodní hranici celoročního výhledu zisku. Zisk na akcii dosáhl 5,10 USD oproti očekávaným 4,70 USD a čistý zisk činil 1,38 mld. USD při konsensu trhu 1,27 mld. USD. Výsledkům pomohlo také vrácení cel v objemu 110 mil. USD, které podle Citi přispělo k zisku na akcii přibližně 0,29 USD. Deere nově očekává celoroční čistý zisk v rozmezí 4,75 až 5,0 mld. USD oproti předchozím 4,5 až 5,0 mld. USD. CEO John May zopakoval očekávání, že rok 2026 bude představovat dno současného cyklu zemědělské techniky, přičemž poukázal na vývoj předobjednávek, zlepšující se zásoby použité techniky a rostoucí využívání pokročilých technologií. Společnost nicméně snížila očekávání vývoje trhu v Evropě a Jižní Americe.
Výrazněji odepisují akcie farmaceutické společnosti Moderna (-21 %), které během včerejší seance připsaly 177 % poté, co Moderna a Merck & Co. uspěly se studií protinádorové vakcíny.
Alphabet (Google) prostřednictvím Waymo oznámil nasazení vlastního ASIC čipu do nejnovější generace robotaxi. Čip má zrychlit zpracování dat ze senzorů a zároveň snížit závislost na externích dodavatelích, jako jsou Nvidia a AMD. Akcie Alphabet třídy A (GOOGL) oslabují o 0,78 %. Akcie třídy C (GOOG) zaznamenávají pokles o 0,8 %.
Super Micro Computer (+0,9 %) dokončila nezávislé vyšetřování svého programu exportní compliance, přičemž vyšetřovací tým dospěl k závěru, že vrcholový management neměl povědomí o údajném schématu odklánění čipů Nvidia.
Hudson River Trading uzavřela víceletou dohodu s CoreWeave (+1,7 %) na využití její AI výpočetní infrastruktury pro vývoj nových obchodních výzkumů a modelů.
Zisk Alibaba Group (-3,7 %) klesl meziročně o více než 75 %, zatímco kvartální kapitálové výdaje vzrostly téměř na 10 mld. USD v souvislosti s investicemi do AI.
Index S&P 500 -0,34 % na 7681,52 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Energie +1,5 % Nezbytná spotřeba -1,6 % Reality +0,3 % Zbytná spotřeba -1,5 % Utility +0,3 % Zdravotní péče -0,7 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Coinbase Global (COIN) +7,0 % Moderna (MRNA) -21 % CF Industries Holdings (CF) +6,5 % Walmart (WMT) -8,9 % Deere (DE) +4,2 % Steel Dynamics (STLD) -5,1 % Nordson Corp (NDSN) +4,2 % Synchrony Financial (SYF) -4,6 % Diamondback Energy (FANG) +3,5 % Norwegian Cruise Line Holdings (NCLH) -4,1 %
Zdroj: Bloomberg
Super Micro Computer: Navigating Volatile but Expanding Revenue ScaleSuper Micro Computer (SMCI -2.22%) primarily generates revenue by developing, manufacturing, and selling advanced server and storage solutions, utilizing modular and open-standard architectures to serve enterprise data centers, complex cloud computing environments, artificial intelligence (AI) applications, and various edge networks globally.
It has recently established multiple strategic collaborations to develop energy-efficient rack-scale infrastructure. It released new liquid-cooling portfolios for high-density environments, while reporting an operating margin of about 13% for the quarter ended June 30, 2026.
Western Digital: Analyzing Consistent Sequential Revenue Gains in StorageWestern Digital (WDC -6.87%) primarily generates revenue by designing, manufacturing, and marketing a broad portfolio of essential data storage devices, including helium hard disk drives, solid-state drives, and portable flash-based systems, for diverse computing platforms and enterprise servers worldwide.
It entered into settlement agreements with institutional investors to dispose of the remaining legacy shares. It appointed new external leadership to its board of directors and reported an operating margin of approximately 42% for the quarter ended July 3, 2026.
Why Revenue Matters for Individual Investors Revenue here refers to the standardized income statement revenue line item. It serves as a foundational metric that helps individual investors understand the total volume of customer sales a business captures before any operating expenses, taxes, or administrative costs are formally deducted.
Quarter (Period End)Super Micro Computer RevenueWestern Digital RevenueQ4 2024$5.7 billion (period ended Dec. 2024)$2.4 billion (Q2 FY2025, period ended Dec. 2024)Q1 2025$4.6 billion (period ended March 2025)$2.3 billion (Q3 FY2025, period ended March 2025)Q2 2025$5.8 billion (period ended June 2025)$2.6 billion (Q4 FY2025, period ended June 2025)Q3 2025$5.0 billion (period ended Sept. 2025)$2.8 billion (Q1 FY2026, period ended Oct. 2025)Q4 2025$12.7 billion (period ended Dec. 2025)$3.0 billion (Q2 FY2026, period ended Jan. 2026)Q1 2026$10.2 billion (period ended March 2026)$3.3 billion (Q3 FY2026, period ended April 2026)Q2 2026$11.1 billion (period ended June 2026)$3.7 billion (Q4 FY2026, period ended July 2026)Data source: Company filings. Data as of Aug. 12, 2026.
Foolish TakeSuper Micro and Western Digital operate at different scales, reflecting the size of their respective industries and competitive positions.
Super Micro Computer reported trailing-12-month revenue of $39 billion, representing a year-over-year increase of 78%. It is one of the leading suppliers of servers, the essential equipment for compute in data centers.
Western Digital operates in a highly competitive market for storage products. These are largely commodity products, where competition can create sharp swings in selling prices, causing volatility in revenue.
Western Digital's TTM revenue surged 35% year over year to nearly $13 billion, as data center demand is pushing storage prices up. But Western Digital's revenue has a long history of peaks and valleys, with no sustained year-over-year growth.
Both companies are benefiting from data center demand, yet Super Micro is growing faster from a large revenue base. This will make it difficult for Western Digital to close the revenue gap. Investors will want to watch whether sustained long-term spending in data centers can create a more sustainable growth path for Western Digital and allow it to break free of past cyclical trends.
SAN JOSE, Calif.--(BUSINESS WIRE)--Super Micro Computer, Inc. (NASDAQ: SMCI) (“Supermicro” or the “Company”) today announced the completion of the internal investigation led by the Company’s independent members of the Board of Directors regarding the March 2026 indictment of three individuals who were associated with the Company at that time.
As previously disclosed, Supermicro was informed on March 19, 2026 that two employees and a contractor were indicted in connection with an alleged conspiracy to commit export-control violations. Supermicro was not named as a defendant in the indictment and is not accused of any wrongdoing. The Company took swift action, and the three individuals no longer have any relationship with Supermicro.
The investigation was led by Scott Angel, the Company’s Lead Independent Director, and Tally Liu, Chair of the Board’s Audit Committee, and was conducted by Munger, Tolles & Olson LLP, which engaged AlixPartners, LLP, as an independent forensic accounting consultant (collectively, the “Independent Advisors”). The results of the investigation were reported to the independent members of the Board and to the entire Board.
The investigation team reviewed the customer transactions that were the subject of the federal indictment, as well as transactions with a selection of other customers who bought restricted products, and did not find any evidence that any current member of senior management had knowledge of the alleged diversion scheme or of any actual diversion of restricted products by the Company. Nor did the investigation find that the Company directly sold export-controlled products to known restricted parties or locations. It also did not find any evidence that the Company’s previously issued financial statements could not be relied upon based on the potential diversion of restricted products. The Company developed and maintained its export compliance program as its sales of restricted products increased during the period under review. The Company’s compliance personnel have acted in good faith, with the support of management, to mitigate the risk of the Company’s products subject to export controls being diverted to restricted parties or locations.
In connection with the investigation, the Company took several personnel actions with respect to employees within its sales, technical support and business development functions, including terminations, for failure to follow Company policies or the Company’s code of conduct.
With the assistance of the Independent Advisors, the independent directors also made recommendations to further enhance the Company’s export compliance program. The Board has adopted those recommendations in full. The Company has already implemented certain recommendations as a result of an internal review overseen by the General Counsel and the Chief Compliance Officer. The independent directors will oversee implementation of the remaining recommendations.
“We are pleased to report the conclusion of this independent investigation,” said Mr. Angel. “The independent directors support the actions the Company has already taken to bolster its internal policies and procedures, as well as the additional enhancements that will be implemented.”
Supermicro will continue working to combat the industry-wide challenge of diversion and remain committed to upholding the highest standards of compliance. In addition, the Company continues to cooperate with relevant government authorities in connection with their ongoing investigations.
About Super Micro Computer, Inc.
Supermicro (NASDAQ: SMCI) is a global leader in Application-Optimized Total IT Solutions. Founded and operating in San Jose, California, Supermicro is committed to delivering first-to-market innovation for Enterprise, Cloud, AI, and 5G/Edge IT Infrastructure. We are a Total IT Solutions provider with server, AI, storage, IoT, switch systems, software, and support services. Supermicro's motherboard, power, and chassis design expertise further enables our development and production, enabling next-generation innovation from cloud to edge for our global customers. Our products are designed and manufactured in-house (in the U.S., Taiwan, and the Netherlands), leveraging global operations for scale and efficiency and optimized to improve TCO and reduce environmental impact (Green Computing). The award-winning portfolio of Server Building Block Solutions® allows customers to optimize for their exact workload and application by selecting from a broad family of systems built from our flexible and reusable building blocks that support a comprehensive set of form factors, processors, memory, GPUs, storage, networking, power, and cooling solutions (air-conditioned, free air cooling or liquid cooling).
Supermicro, Server Building Block Solutions, and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc. All other brands, names, and trademarks are the property of their respective owners.
Key Takeaways Super Micro Computer ships across NVIDIA and AMD AI platforms, supporting successive system transitions.SMCI is expanding direct liquid cooling as its fiscal 2027 plan targets over 6,000 racks monthly.SMCI's DCBBS strategy combines compute, storage, cooling, power, networking and data-center software. Super Micro Computer (SMCI - Free Report) leads the AI infrastructure space by enabling customers with early availability of new AI systems as a competitive advantage. In fourth-quarter fiscal 2026, the company was shipping volume products across NVIDIA’s (NVDA - Free Report) GB300 NVL72, HGX B300, B200 NVL4 and NVIDIA RTX 6000 Pro lines.
SMCI is also preparing systems based on the NVIDIA Vera Rubin and Vera CPU platforms. With Advanced Micro Devices, Super Micro Computer launched the Helios product line and MI450 Total Solution while continuing to support MI350 and MI355X systems. SMCI is also shipping platforms like Intel Xeon 6+, developing systems for ARM-based AGI processors.
SMCI continues to frame time-to-market as a core differentiator. The company’s broad support across multiple processor ecosystems gives customers more deployment choices and can help the company participate in successive AI platform transitions. SMCI is also pursuing factory automation, design optimization and standardized building blocks to raise manufacturing yields and streamline logistics.
Super Micro Computer is moving beyond stand-alone servers toward complete Data Center Building Block Solutions. DCBBS integrates GPU and CPU servers, enterprise storage, direct liquid cooling, power infrastructure, high-speed switches, networking, data-center management software and lifecycle services.
Rising rack density is increasing the importance of advanced cooling in AI data centers, and Super Micro Computer continues to expand direct liquid-cooling capabilities. Its fiscal 2027 capacity plan calls for more than 6,000 racks per month, including over 3,000 direct liquid-cooled racks. These factors make SMCI a major player in the AI infrastructure space.
How Competitors Fare Against SMCISMCI is at a crossroads with major players like Hewlett Packard Enterprise (HPE - Free Report) and Dell Technologies (DELL - Free Report) . Hewlett Packard Enterprise and NVIDIA have expanded their collaboration to provide enterprises with an integrated AI infrastructure portfolio spanning hardware, software and cloud management to scale generative AI, agentic AI and high-performance computing workloads.
At the core of the collaboration is HPE AI Factory with NVIDIA, a turnkey AI infrastructure solution that combines HPE's compute, storage, networking and GreenLake platform with NVIDIA's GPUs, CPUs, networking technologies and AI Enterprise software. The integrated offering allows enterprises to build and manage AI environments through a unified platform.
Dell Technologies, meanwhile, is pursuing a broader ecosystem strategy through its Dell AI Factory with NVIDIA. Rather than focusing solely on servers, Dell is expanding across compute, storage, networking, automation and software. Dell recently introduced PowerEdge R9822 and M9822 servers powered by NVIDIA Vera CPUs for Agentic AI workloads.
SMCI’s Price Performance, Valuation and EstimatesShares of Super Micro Computer have gained 27.8% year to date compared with the Zacks Computer – Storage Devices industry’s growth of 244.3%.
SMCI YTD Performance Chart
Image Source: Zacks Investment Research
From a valuation standpoint, SMCI is trading at a discount at a forward 12 Month P/S multiple of 0.35X compared with the industry’s P/S multiple of 3.13X.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2027 earnings implies a year-over-year decline of 4.13%. Estimates for fiscal 2026 earnings have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Super Micro Computer currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Super Micro Computer (SMCI) is a critical AI infrastructure integrator, experiencing rapid revenue and margin growth, yet trades at a deeply discounted forward P/E of 9. Ongoing regulatory scrutiny and a recent secondary equity offering have created market skepticism and an estimated $75 billion valuation penalty, in my opinion. Despite regulatory risks, SMCI's robust order book, technological leadership, and replenished $7.5 billion cash position support continued operational strength and minimized dilution risk.
Key Takeaways nVent expects 2026 data center sales to exceed $2 billion, more than double 2025 levels.Super Micro's GPU-heavy mix is pressuring margins, with fiscal 2027 Q1 gross margin forecast at 10.4%-10.8%.nVent ended Q2 with a $2.5 billion backlog as demand for data center infrastructure remained strong. nVent Electric (NVT - Free Report) and Super Micro Computer (SMCI - Free Report) are major players in the data center market, particularly in the rapidly growing area of AI data center infrastructure and liquid cooling solutions. While nVent Electric mainly sells electrical enclosures, connections and protection products used across industrial, commercial and infrastructure markets, including data centers, Super Micro Computer is strengthening its position with end-to-end AI rack-scale systems that integrate compute, networking, storage, and liquid cooling.
Both NVT and SMCI are positioned to benefit from long-term infrastructure and data-center investment trends. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for nVent Electric StocknVent Electric is seeing strong demand from data centers as spending on artificial intelligence (AI) infrastructure continues to rise. NVT expects the infrastructure vertical to post strong double-digit growth in 2026, supported by higher AI-related data center investments. Further, the company expects data center sales to exceed $2 billion in 2026, more than double from 2025 levels.
Growth is coming from liquid cooling, cable management and engineered buildings. NVT is also serving a broad customer base, including hyperscalers, neo-clouds and multi-tenant data centers. The company ended the second quarter with a $2.5 billion backlog, and management sees data center orders remaining strong in the third quarter of 2026.
The growing use of AI is adding another source of demand. Due to rising computing needs, AI data centers require more power, which is leading to rising investment in power infrastructure. NVT serves utilities directly as well as through distribution partners. The company sees opportunities in engineered buildings and other infrastructure used around data centers, as well. This gives the company an opportunity to benefit from higher power demand beyond its direct data center business.
NVT is also adding capacity to meet rising demand. The company expects to spend about $130 million on capital expenditures in 2026, up 40% year over year. Most of the higher investment is going toward capacity for data centers, power utilities and supply-chain resilience. The company opened its Blaine facility in Minnesota earlier in 2026, which effectively doubled its liquid-cooling capacity. Further, management said another expansion is needed and announced the Blaine 2 facility, which is expected to open in the first half of 2027.
The above-mentioned factors show that NVT remains well-positioned to benefit from strong AI-related demand, healthy orders and new capacity, which could help the company maintain its growth momentum.
The Case for SMCI StockSuper Micro Computer is seeing strong demand for liquid-cooled systems as AI data centers use more powerful and higher-density servers. Management expects liquid cooling to grow quickly and eventually become a major part of data center infrastructure. SMCI said newer GPU and CPU platforms are now ready for liquid cooling, which could increase demand for its systems.
SMCI already has experience in liquid cooling. Management said the company was an early leader in this technology and shipped more than 80% liquid-cooled systems to the market in 2024. The company is also increasing production capacity. Its total manufacturing capacity is expected to exceed 6,000 racks per month, including more than 3,000 direct liquid-cooled racks. Most of these lines support high-density 250-kilowatt rack platforms.
Liquid cooling is also part of SMCI’s Data Center Building Block Solutions (DCBBS). The company combines servers, storage, liquid cooling, networking, software and other data center equipment in one solution. SMCI says this can help customers build data centers faster and lower their total costs. This is important because power, cooling and networking issues delayed some customer deployments in the fourth quarter. If liquid cooling becomes more common in AI data centers, SMCI’s growing capacity and DCBBS offering could help it benefit from this trend.
However, SMCI's non-GAAP gross margin declined to 10.9% in fiscal 2026 from 11.2% in fiscal 2025. A major reason behind the decline in gross margin is the company's high exposure to GPU-based AI systems. Management noted that high-volume GPU products generally have lower margins than CPU, storage, IoT and enterprise products. As SMCI expanded its AI infrastructure business, the product mix put pressure on overall gross margins.
Further, SMCI's gross margin outlook for the first quarter of fiscal 2027 also points to continued pressure. After reporting fourth quarter non-GAAP gross margin of 17.6%, SMCI expects gross margins to be in the range of 10.4%-10.8% in the first quarter fiscal 2027. The lower first quarter fiscal 2027 guidance, reflects steep sequential decline and reinforces the concern that margins could remain volatile as the company continues to scale its AI infrastructure business.
How Do Earnings Estimates Compare for NVT & SMCI?NVT has a steady earnings growth outlook compared with SMCI.
The Zacks Consensus Estimate for NVT’s 2026 EPS is pegged at $4.56 revised upward by 12.5%, over the past 30 days and indicates a year over year growth of 53.1%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SMCI’s fiscal 2027 is pinned at $3.48, revised upward by 2.95% over the past seven days and indicates a year over year decline of 4.1%.
Image Source: Zacks Investment Research
NVT vs. SMCI: Price Performance and ValuationYear to date, shares of nVent Electric and SMCI have surged 73.5% and 30%, respectively.
NVT vs. SMCI: YTD Price Return Performance
Image Source: Zacks Investment Research
Currently, nVent Electric is trading at a forward sales multiple of 4.57X, higher than SMCI’s forward sales multiple of 0.37X. NVT’s rally reflects investor excitement about AI-related data center demand, putting it above SMCI in terms of valuation, reflecting the high growth expectations of the company in the long term.
NVT vs. SMCI: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Conclusion: NVT Has an Edge Over SMCIBoth nVent Electric and SMCI are benefiting from higher spending on AI data centers and infrastructure. However, SMCI’s near-term prospects suffer from higher exposure to lower-margin GPU systems due to which the company’s margins could remain volatile in the near-term. In contrast, nVent Electric is experiencing strong demand for data center infrastructure, which is helping drive strong orders and a growing backlog.
Currently, nVent Electric sports a Zacks Rank #1 (Strong Buy), giving a clear edge over SMCI, which carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Super Micro Computer's 67% monthly surge is backed by AI demand and a record backlog, but inventory, competition and execution risks cloud the outlook.
Major stocks look a touch tired in the premarket trading for Monday.
In this article:TSLA
-0.72%
MSFT
-2.26%
SMCI
-2.96%
The market for Tesla looks a little sluggish in pre-market trading after forming a massive resistive candle right at the gap. That is, technically speaking, a pretty poor setup, and therefore could cause some issues for the bulls today.
The $350 level is an area that a lot of people will be watching. It’s been important in the past, and now that the 50-day EMA is racing towards it, that could cause a little bit more of a problem as well. Ultimately, this is a market that had recently found significant support. Higher rates, though, and some concerns about the consumer will also possibly come into play here as well.
Microsoft Microsoft looks like it is going to be opening up a little bit negative. The market has recently shot straight up in the air. This is not a market that I have any interest in shorting, but it does look a little overextended and exhausted, and with that being the case, a pullback would not be the most surprising thing in the world here.
We’re 3 days away from the ex-dividend date. That could provide a little bit of a cushion with that $0.91 a share dividend. It’s not a massive one, but it is something. The golden cross recently has occurred, so that’s another reason that I’m somewhat positive. I also recognize, that a little bit of patience might offer the opportunity of getting shares a little cheaper.
Super Micro Computer Super Micro Computer is struggling in pre-market trading as well as the $40 barrier and the top of a gap from June come into play. The shooting star from the previous session, of course, has traders perhaps thinking maybe it’s a little bit exhaustive on Friday, and then now it looks like we’re rolling over a little bit into Monday as well.
Pullback at this point in time might be intriguing, and it might set up a nice reversal. And that essentially, I think, is the story with all 3 of these markets. We’ll just have to wait and see, but they all share the theme of being just a little extended, and perhaps opening up on the downside.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.
