Why Now Could Be the Right Time to Buy Super Micro Computer Stock

Super Micro Computer (SMCI) reported strong financial results for fiscal year 2026, with revenue increasing by 78% and adjusted earnings per share rising by 76% year-over-year. The company's Artificial intelligence (AI) and IT infrastructure solutions continue to see robust demand, with AI-related solutions contributing more than 80% of revenue over the next several quarters.

SMCI's record backlog of over $60 billion provides a substantial pipeline of business to be delivered in the coming quarters. The enterprise and channel business, which grew strongly in Q4, accounted for half of quarterly revenue. The segment grew by 172% year-over-year and 98% sequentially. Revenue from OEM appliances and large data center customers also increased by 50% year-over-year.

SMCI's customer base is diversifying, with nine customers generating over $1 billion in annual revenue, compared to only four in the previous year. The company is also working on improving margins and profitability, with an adjusted gross margin of 17.6% in Q4 FY26, up from 10.1% in Q3. Super Micro Computer's stock is trading at a relatively low valuation, with a forward earnings multiple of 9.5x, which is significantly lower than its industry peers such as Dell Technologies (DELL) and Hewlett Packard Enterprise (HPE).

Analysts expect double-digit EPS growth in FY27 and FY28, further supporting the stock's upside potential.