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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

Breaking News: Super Micro Computer reported strong fiscal second-quarter results with revenue surging 123% year-over-year to $12.7 billion, exceeding estimates of $10.4 billion. The growth was driven by robust artificial intelligence demand. Despite the positive earnings report, the stock tumbled. Analysts at Wedbush Securities recommend a buy, citing the company's AI growth prospects. Meanwhile, Super Micro Computer's AI server solutions are gaining traction. Tom Gayner reduced his position in ADI, while Richard Pzena initiated a new position in BR.

1.c. Company Highlights

2. Super Micro Computer's Q2 FY'26 Earnings: A Strong Beat on Revenue and EPS

Super Micro Computer, Inc. reported a robust Q2 fiscal year '26 with record revenue of $12.68 billion, representing a 123% year-over-year growth. The non-GAAP gross margin stood at 6.4%, while the non-GAAP diluted net income per share came in at $0.69, significantly beating estimates of $0.49. The company's AI infrastructure demand continues to accelerate, driven by its Rack Scale Systems and Data Center Building Block Solution (DCBBS). The revenue growth was broad-based, with the company expecting to reach at least $40 billion in revenue for the full fiscal year '26, up from its previous guidance.

Publication Date: Feb -08

📋 Highlights
  • Record Revenue Surge: Super Micro reported Q2 FY26 revenue of $12.68 billion, a 123% year-over-year growth, driven by AI infrastructure demand.
  • DCBBS Profit Contribution: The Data Center Building Block Solution (DCBBS) accounted for 4% of profit in H1 FY26 and is projected to contribute at least double-digit profit by 2026.
  • Fiscal Year Guidance Raised: Revenue guidance increased to at least $40 billion for FY26, supported by $12.3 billion Q3 revenue and $0.60 minimum non-GAAP EPS.
  • Margin Expansion Outlook: Non-GAAP gross margin is expected to improve quarterly due to better customer mix and reduced freight/production costs, with CEO Charles Liang aiming for double-digit net margin growth.
  • Capital Strength: The company secured $5 billion in credit facilities and raised capital, with $2 billion and $1.8 billion credit lines, ensuring liquidity for growth amid component shortages.

Operational Highlights and Margin Dynamics

The company's gross margin was impacted by customer and product mix, as well as higher freight, production, and expedite costs. However, CEO Charles Liang expects the gross margin to improve quarter after quarter due to improving customer mix, reduced expedite transportation costs, and increasing contribution from DCBBS. As Liang noted, DCBBS is expected to contribute at least double-digit to profit by the end of calendar '26, driven by its one-stop shop solution for customers to build data centers, saving time and costs.

Growth Prospects and Customer Diversification

Super Micro expects growth to be driven by a diversified customer base, with a large customer accounting for 10% of revenue in the December quarter. The customer concentration is expected to decrease as revenue grows. The company is investing in engineering support and services to help new customers, which has impacted gross margins. The company's revenue guidance of $40 billion may be conservative, considering potential component shortages.

Valuation and Future Prospects

With a P/E Ratio of 23.51 and an EV/EBITDA of 27.22, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 19.2%. The company's return on equity (ROE) stands at 13.33%, indicating a relatively healthy profitability profile. The significant beat on EPS and revenue guidance raise suggests that the company is well-positioned to capitalize on the growing demand for AI infrastructure.

3. NewsRoom

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How A 2X Leveraged AI Server ETF Gained 20% in Minutes

Feb -08

Source: 247wallst.com

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Market Today: Dow tops 50,000 as chip leaders rebound; Stellantis plunges

Feb -06

Source: gurufocus.com

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Super Micro Computer Tumbles on AI Boom Backlash

Feb -06

Source: 247wallst.com

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After NVIDIA, Is SMCI the Smartest AI Stock to Buy Right Now?

Feb -05

Source: zacks.com

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Live Nasdaq Composite: Tech Sell-Off Intensifies on Capex Concerns

Feb -05

Source: 247wallst.com

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Super Micro Computer (NASDAQ:SMCI) Trading Up 13.8% on Better-Than-Expected Earnings

Feb -05

Source: defenseworld.net

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Super Micro Computer: Still Plenty Of Issues But Upgrading On Valuation - Hold

Feb -05

Source: seekingalpha.com

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Stock Market Today, Feb. 4: Super Micro Computer Surges on Blowout Earnings Fueled by AI Server Demand

Feb -04

Source: fool.com

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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HP

A-Score: 5.6/10

Value: 9.0

Growth: 4.1

Quality: 4.8

Yield: 8.0

Momentum: 1.5

Volatility: 6.3

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NetApp

A-Score: 5.5/10

Value: 3.4

Growth: 5.7

Quality: 7.4

Yield: 5.0

Momentum: 4.5

Volatility: 7.0

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Arista Networks

A-Score: 5.0/10

Value: 0.6

Growth: 9.4

Quality: 8.3

Yield: 0.0

Momentum: 8.0

Volatility: 3.7

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Dell Technologies

A-Score: 4.6/10

Value: 6.6

Growth: 4.0

Quality: 4.6

Yield: 4.0

Momentum: 5.0

Volatility: 3.7

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Western Digital

A-Score: 4.3/10

Value: 1.8

Growth: 3.4

Quality: 7.3

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

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Super Micro Computer

A-Score: 3.9/10

Value: 3.6

Growth: 9.8

Quality: 5.0

Yield: 0.0

Momentum: 3.5

Volatility: 1.7

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

34.38$

Current Price

34.38$

Potential

-0.00%

Expected Cash-Flows