Did SMCI Stock Just Rise For The Wrong Reason?
Super Micro Computer (SMCI) stock surged 9.5% on Thursday, September 17, reaching just above $40. This rise came after Goldman Sachs predicted an aggressive expansion of the AI servers market through the end of the decade. However, this forecast primarily concerns the industry, not a specific manufacturer like SMCI. Analysts attributed Thursday's climb to a broad equity rebound following the Federal Reserve's rate decision on Wednesday, rather than the AI server market forecast.
In contrast, other tech companies like Hewlett Packard Enterprise (HPE) also rose 8.0% that day, indicating capital shifting into AI server producers. On the flip side, SMCI faced criticism in the form of a shareholder rights law firm issuing a press release to solicit clients for a potential investigation into company management.
Despite a robust backlog of over $60 billion in new orders in the fiscal fourth quarter of 2026, SMCI's stock did not reflect the anticipated delivery and deployment constraints. The company sells data center building block solutions, but its manufacturing capacity is capable of producing over 3,000 direct liquid-cooled racks per month.
However, the delayed shipments resulted in near-the-low end of management's guidance for fiscal Q4 2026. The delayed shipments were pushed into subsequent quarters. Non-GAAP gross margin for fiscal Q4 2026 improved to 17.6% from 10.1% in Q3 2026, largely due to favorable customer and product shipment mix. Management's guidance for fiscal Q1 2027 is anticipated to be between 10.4% and 10.8%, a figure that this entire question revolves around.
The company's revenue over the past year was around $39 billion, with the market valuing the entire business at approximately $25 billion, less than a year of its sales. The primary concern is not whether SMCI can sell AI servers, but what it retains from each sale. The stock's volatility over the past six trading sessions, swinging from an 8.4% drop to a 7.3% increase, highlights that one session's rise does not guarantee future performance.
The next significant jump in SMCI's stock price will likely hinge on a different company and the same afternoon of work.
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