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1. Company Snapshot

1.a. Company Description

Super Micro Computer, Inc., together with its subsidiaries, develops and manufactures high-performance server and storage solutions based on modular and open architecture.Its solutions range from complete server, storage, modular blade servers, blades, workstations, full racks, networking devices, server management software, and server sub-systems, as well as support and services.The company also provides application-optimized server solutions, including rackmount and blade servers, storage systems, 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, 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 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 sales force, distributors, value-added resellers, system integrators, and original equipment manufacturers.The company primarily operates in the United States, Europe, Asia, and internationally.


Super Micro Computer, Inc.was incorporated in 1993 and is headquartered in San Jose, California.

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1.b. Last Insights on SMCI

Super Micro Computer's recent struggles are attributed to disappointing earnings results, intensified competition in the AI server market, and shrinking margins. The company's revenue growth is not translating into proportional EPS gains, raising concerns about operational leverage and cost control. A rating downgrade to "hold" cites disappointing execution despite strong AI demand. Additionally, margin pressure, cash flow strains, and rapid expansion have raised fresh concerns for investors. The company's recent earnings release showed a revenue miss and weak guidance.

1.c. Company Highlights

2. Super Micro Computer's Earnings Report: A Strong Start to FY2026

Super Micro Computer reported Q1 fiscal year 2026 revenue of $5 billion, down 15% year-over-year and 13% quarter-over-quarter. However, the company's AI GPU platforms represented over 75% of Q1 revenues, continuing to be the key growth driver. The actual EPS came out at $0.35, beating estimates of $0.28. The company's guidance for Q2 fiscal year 2026 is net sales in the range of $10 billion to $11 billion, with GAAP diluted net income per share of $0.37 to $0.45 and non-GAAP diluted net income per share of $0.46 to $0.54.

Publication Date: Nov -06

📋 Highlights
  • Revenue Shift:: $1.5 billion shifted from Q3 to Q4 fiscal 2026 due to customer configuration upgrades.
  • Backlog Growth:: $13 billion in back orders for NVIDIA Blackwell Ultra GB300, including the largest single deal in the company’s 32-year history.
  • Production Capacity:: Aiming to scale to 6,000 racks/month (3,000 DLC racks) by FY26, with new facilities in Malaysia contributing to output.
  • Full-Year Outlook:: Raised FY26 sales guidance to at least $36 billion, with Q2 revenue projected between $10–11 billion.
  • DCBBS Margin Impact:: Data Center Building Block Solution expected to deliver over 20% profit margin in data center infrastructure, driving future gross margin improvements.

Growth Drivers

The company's Data Center Building Block Solution (DCBBS) is expected to become a significant contributor to its future success, enabling rapid planning, design, and deployment of AI-ready data centers. The initial feedback from customers has been positive, and the company is excited about the product line's potential to ramp up quickly. As Charles Liang mentioned, "the company's revenue has grown from $5-6 billion to $10 billion quarterly, presenting short-term challenges, but they are leveraging facilities in the USA, Taiwan, and Malaysia, and hiring new people to train and add capacity."

Valuation Metrics

With a P/E Ratio of 31.58 and an EV/EBITDA of 26.04, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 53.1%, which may justify the current valuation. However, the P/S Ratio of 1.19 and ROE of 12.46% suggest that the company's profitability is already reflected in its stock price.

Expansion Plans

The company is executing an aggressive global expansion, with new production facilities in Taiwan, the Netherlands, Malaysia, and the Middle East coming online to enlarge production capacity. The company is on track to scale production to 6,000 racks per month, including 3,000 DLC racks, within the fiscal year. This expansion is expected to drive growth and improve gross margins over time.

Margin Expectations

The company's long-term gross margin target of 14-17% is still intact, but the market has changed, and they are currently focused on navigating the current environment. David Weigand noted that "we're working to raise margins in a competitive landscape and hope to return to double digits." The company's focus on DCBBS and enterprise accounts is expected to drive growth and improve profitability.

3. NewsRoom

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Why Is Super Micro (SMCI) Down 19.9% Since Last Earnings Report?

Dec -04

Source: zacks.com

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AI needs power desperately. Here's how to invest in companies profiting from the pain.

Dec -03

Source: marketwatch.com

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Acadia Healthcare downgraded on rising legal and insurance costs, shares drop

Dec -03

Source: proactiveinvestors.com

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The AI Investing Cheat Code Just Got Patched

Dec -03

Source: investorplace.com

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Super Micro, Palantir, Oracle Crash In November Tech Stock Massacre

Dec -01

Source: benzinga.com

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TSLA, PLTR and SMCI Forecast – Stocks Look Soft in Early Monday Trading

Dec -01

Source: fxempire.com

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If This AI Theme Really Deteriorates, These Are the 3 Stocks to Short

Dec -01

Source: 247wallst.com

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American Century Companies Inc. Reduces Stake in Super Micro Computer, Inc. $SMCI

Dec -01

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.20%)

6. Segments

Develops and Provides High Performance Server Solutions

Expected Growth: 10.2%

Super Micro Computer's high-performance server solutions experience growing adoption due to increasing demand for cloud computing, IoT, and AI applications, driving the segment's growth.

7. Detailed Products

Servers

Super Micro Computer, Inc. offers a wide range of servers, including rackmount servers, tower servers, and blade servers, designed for data centers, cloud computing, and enterprise environments.

Storage Systems

Super Micro Computer, Inc. provides a variety of storage systems, including all-flash arrays, hybrid arrays, and JBODs, designed for high-performance storage and data management.

GPU Servers

Super Micro Computer, Inc. offers GPU-accelerated servers, designed for AI, deep learning, and high-performance computing applications.

Motherboards

Super Micro Computer, Inc. provides a wide range of motherboards, including server motherboards, workstation motherboards, and embedded motherboards, designed for various applications.

Chassis

Super Micro Computer, Inc. offers a variety of chassis, including rackmount chassis, tower chassis, and mini-tower chassis, designed for servers, storage systems, and other applications.

Power Supplies

Super Micro Computer, Inc. provides a range of power supplies, including redundant power supplies, high-efficiency power supplies, and custom power supplies, designed for servers, storage systems, and other applications.

Networking Products

Super Micro Computer, Inc. offers a variety of networking products, including network interface cards, switches, and routers, designed for data centers, cloud computing, and enterprise environments.

8. Super Micro Computer, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Super Micro Computer, Inc. is medium due to the availability of alternative products from competitors, but the company's strong brand reputation and customer loyalty mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Super Micro Computer, Inc. due to the company's strong relationships with its customers and the customized nature of its products, making it difficult for customers to switch to competitors.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Super Micro Computer, Inc. due to the company's dependence on a few key suppliers, but the company's large scale of operations and strong relationships with suppliers mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low for Super Micro Computer, Inc. due to the high barriers to entry in the industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry is high for Super Micro Computer, Inc. due to the competitive nature of the industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 12.83%
Debt Cost 4.24%
Equity Weight 87.17%
Equity Cost 10.63%
WACC 9.81%
Leverage 14.72%

11. Quality Control: Super Micro Computer, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Growth: 3.7

Quality: 4.8

Yield: 7.0

Momentum: 1.5

Volatility: 6.3

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A-Score: 5.2/10

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Quality: 7.2

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Momentum: 4.0

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Growth: 9.4

Quality: 8.5

Yield: 0.0

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Value: 5.3

Growth: 4.0

Quality: 4.6

Yield: 3.0

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Volatility: 4.0

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Western Digital

A-Score: 4.5/10

Value: 2.3

Growth: 3.4

Quality: 7.1

Yield: 0.0

Momentum: 10.0

Volatility: 4.0

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Super Micro Computer

A-Score: 4.4/10

Value: 3.3

Growth: 9.9

Quality: 5.6

Yield: 0.0

Momentum: 6.5

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

34.23$

Current Price

34.23$

Potential

-0.00%

Expected Cash-Flows