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Should Super Micro’s AI Expansion And Margin Concerns Require Action From Super Micro Computer (SMCI) Investors?
Simply Wall St
Reviewed by Sasha Jovanovic
- In late November 2025, Super Micro Computer, Inc. presented its AI-focused server and data centre solutions at the UBS Global Technology and AI Conference in Scottsdale, highlighting its Data Centre Building Block Solutions and partnerships with NVIDIA and AMD.
- At the same time, the company’s push toward a US$36.00 billion fiscal 2026 revenue target, ongoing international capacity expansion, and shifting short interest underscored the tension between ambitious growth plans and market concerns over margins and AI hardware competition.
- We’ll now examine how Super Micro’s aggressive expansion amid sector-wide AI sentiment cooling could influence its existing investment narrative.
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Super Micro Computer Investment Narrative Recap
To own Super Micro Computer today, you need to believe its AI focused server platforms and Data Centre Building Block Solutions can translate booming GPU demand into durable, profitable growth despite recent margin pressure. November’s 36.8% share price drop, tied to competition and rising costs, directly affects the key near term catalyst of executing on its US$36.00 billion fiscal 2026 revenue goal, while reinforcing the central risk that AI hardware “price wars” could keep profitability under strain.
The company’s raised fiscal 2026 sales guidance to at least US$36.00 billion is the announcement that most directly intersects with this backdrop, because it increases the execution bar just as sector wide AI enthusiasm has cooled and AI server competition has intensified. How effectively Super Micro ramps its Blackwell era systems and DCBBS offerings with NVIDIA and AMD will likely shape whether the recent pullback looks like a bump in the road or a warning sign for investors focused on...
Read the full narrative on Super Micro Computer (it's free!)
Super Micro Computer's narrative projects $48.2 billion revenue and $2.4 billion earnings by 2028.
Uncover how Super Micro Computer's forecasts yield a $48.53 fair value, a 47% upside to its current price.
Exploring Other Perspectives
Thirty seven members of the Simply Wall St Community currently place Super Micro’s fair value between US$48.53 and US$82.39, highlighting wide dispersion in expectations. Against this range, the recent share price slide and ongoing concerns about AI server margin pressure show why it can be useful to compare several independent views on what might drive the company’s performance next.
Explore 37 other fair value estimates on Super Micro Computer - why the stock might be worth over 2x more than the current price!
Build Your Own Super Micro Computer Narrative
Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.
- A great starting point for your Super Micro Computer research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
- Our free Super Micro Computer research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Super Micro Computer's overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
About NasdaqGS:SMCI
Super Micro Computer
Develops and sells server and storage solutions based on modular and open-standard architecture in the United States, Asia, Europe, and internationally.
Exceptional growth potential with adequate balance sheet.
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Trending Discussion
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jayhcee on Motorcar Parts of America ·
MPAA often has inventory and core-related timing issues. While this quarter’s problems may ease, similar issues have recurred historically and can persist for several quarters. It's not a one-off, it's a structural part of their business. Core returns are simply estimates: How many customers will actually return the original part; how quickly they'll do so; how many are useable; what they're worth, etc. MPAA predicts X sales in a quarter and Y core returns and its reserves, inventory values, etc. are based on that. If they expect a 90% core return rate and only 80% come back it doesn't change cash but they have to write down inventory and increase cost of goods sold which impacts EPS. They've also cited inventory buildup at key customers multiple times in the past. The assumption the latest backlog will all shift into future quarters this year with no impact on pricing, etc. seems more like wishful thinking. Retailer X was slated to buy $10m in parts this quarter but finds they have a lot more inventory on hand than they anticipated so they pushed the order. Realistically there are likely to be SKU cuts, reduction in safety stock on others, etc. Assuming that all $10m will come in this year plus the regular replenishment seems pretty unrealistic. MPAA also has a shaky track record when it comes to new lines and the supposed impact on business. If you look at the EV testing solutions hype back around 2020 that was supposed to diversify them beyond traditional reman and be a higher margin business that would grow with EV adoption. But it has never turned into a material contributor. The debt reduction and stock buy backs are meaningful but IMHO this narrative takes a very optimistic view of things.
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User on Discovery Silver ·
The problem with your reasoning is, that 37 Moz are AgEq. If you read the FS, you'll find out that annual silver production is more around 14-15 Moz. But at the time of the FS, that 37 Moz AgEq was a number that came of a formula (which is specified in the FS), being a mix of four metals: Ag, Au, Pb and Zc. But now, beginning of 2026, the spotprices of silver and gold have risen so much in comparison to Pb and Zc prices, that you need to recalculate the AgEq number of 37 Moz according to the recent prices. This will result in the fact that silver and gold hold more value in that mix of four metals, and thus dragg the 37 Moz AgEQ number down to somewhere around 18 Moz AgEq. The more valuable silver and gold become, the lower the AgEq number will get, but it'll never get under the yearly average production of silver, which should be somewhere between 14-15 Moz Ag in the first four years. So in short, with this in mind, your fair value is rather around CA$ 50, even with silver at 300 usd an ounce. But a more prudent stockprice forecast is around CA$ 20 and hopefully going toward CA$ 30. So DSV is a top stock, because it's producing actual gold every quarter. But don't put your hopes too high.
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