Super Micro Should Get A Super Catalyst (Earnings Preview)

Summary

  • I maintain my Buy rating on Super Micro Computer, Inc., expecting a strong Q4 driven by robust AI demand, new product launches, and global expansion.
  • SMCI's recent margin pressures and Q3 reset have set a low bar for Q4, creating a high probability for a double-beat on revenue and EPS.
  • The company’s rapid expansion in liquid-cooled and Blackwell-based AI solutions, plus a $20 billion DataVolt partnership, positions SMCI for a strong Q4 shipment ramp and margin recovery.
  • Valuation remains attractive at 16x forward EV/EBITDA, with potential upside to $81.25/share if margin recovery and order monetization materialize.
  • Risks exist if Q4 disappoints, but I believe the ongoing Blackwell ramp and DCBBS rollout will catalyze further gains; recovery rally isn't done yet.
  • Looking for a helping hand in the market? Members of Beyond the Wall Investing get exclusive ideas and guidance to navigate any climate. Learn More »

Rolled newspaper with the headline Quarterly Results

Zerbor

My Coverage Of SMCI Stock

I've been covering Super Micro Computer, Inc. (NASDAQ:SMCI) since January 2024, initially rating the stock as a Buy, and then withdrawing that rating and assigning it again as the market conditions and the

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This article was written by

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Oakoff Investments is a personal portfolio manager and a quantitative research analyst with 5 years helping readers find a reasonable balance between growth and value by sharing proprietary Wall Street information.

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Analyst’s Disclosure:I/we have a beneficial long position in the shares of SMCI either through stock ownership, options, or other derivatives. 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.

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