Super Micro: Exiting Survival Mode

 

• Super Micro Computer continues to see robust AI demand and innovative infrastructure products outweigh recent internal and external controversies.
• SMCI posted a revenue miss in FQ3'26 due to data center delays but exceeded earnings targets, with gross margins rebounding to 9.9% (10.1% non-GAAP).
• Management maintains FY26 revenue guidance near $40 billion and is rapidly expanding manufacturing capacity, targeting far over $100 billion in annualized output.
• The stock only trades at ~10x conservative EPS targets with a base case for far higher EPS targets based on the revenue capacity and normalized gross margins.

Super Micro Computer, Inc. (SMCI) has been in the hot seat the last couple of years due to internal and external employee actions, but the company always seems to come out strong. Due to overwhelming AI demand and compelling AI infrastructure products, customers appear to quickly move beyond ethical concerns. My investment thesis remains ultra bullish as results stay strong while the bad optics appear to have no impact on the business.

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Disclosure: No position mentioned.