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what it is
Super Micro builds the servers and storage boxes that data centers buy when AI demand shows up with a stopwatch.
how it gets paid
Last year Super Micro Comp made $22.0B in revenue.
why it's growing
Revenue grew 46.6% last year. This was supported by hyperscale customers racing to build out next-generation ai infrastructure on nvidia’s gb300 platform.
what just happened
Revenue hit $17.7B, up 40% vs. prior year, and EPS reached $0.86.
At a glance
B+ balance sheet — decent shape, but not bulletproof
45/100 earnings predictability — expect surprises
19.0x trailing p/e — priced about right
25.5% return on capital — every dollar works hard here
xvary composite: 44/100 — below average
What they do
Super Micro builds the servers and storage boxes that data centers buy when AI demand shows up with a stopwatch.
Speed is the moat. Super Micro builds modular systems, which means standardized parts you can swap fast, so what: customers get servers deployed sooner. That helped annual revenue hit $22.0 billion, up 46.6%, even while the company spent just 2.9% of sales on R&D.
How they make money
$22.0B
annual revenue · their business grew +46.6% last year
total revenue
$22.0B
+46.6%
The products that matter
designs and ships server systems
Server and data center systems
$22.0B revenue · +46.6% growth
it's effectively the whole business. revenue grew fast enough to get everyone's attention. a 3.5% net margin kept the celebration short. you do not have segment diversification here. you have one demand wave and one question: does it become durable profit.
entire story
Key numbers
$58B
2029 sales goal
Revenue is projected to reach $58 billion by fiscal 2029 from $22.0 billion today, so what: you are paying for a company expected to get about 2.6 times larger.
19.0x
trailing p/e
P/E → price-to-earnings ratio → how many dollars you pay for $1 of profit. At 19.0x, the stock is not priced like a typical hyper-growth name.
25.5%
return on capital
Return on capital → profit generated from the money used in the business → so what: SMCI is still turning investment into earnings efficiently.
6.7%
net margin
Net margin → profit left after expenses → so what: the company keeps just $6.70 from every $100 of sales, which is thinner than the hype suggests.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 4 — safer than 20% of stocks
- price stability 5 / 100
- long-term debt $4.7B (20% of capital)
- net profit margin 6.7% — keeps 7 cents of every dollar in revenue
- return on equity 28% — $0.28 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in SMCI 3 years ago → it's now worth $32,450.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Revenue hit $17.7B, up 40% vs. prior year, and EPS reached $0.86.
The business is still growing at a wild pace, but margins are the quiet problem. Gross margin was 7.2%, and the December quarter showed how fast freight and part shortages can eat the spread.
$17.7B
revenue
$0.86
eps
7.2%
gross margin
the number that mattered
Gross margin at 7.2% matters most because revenue can grow 40% and still disappoint you if each dollar gets less profitable.
-
super micro computer delivered a record december quarter.
-
revenue came in at $12.7 billion, crushing its own $10 billion-$11 billion guidance and surging 123% vs. prior year.this was supported by hyperscale customers racing to build out next-generation ai infrastructure on nvidia’s gb300 platform. about $1.5 billion of that total reflected shipments delayed from the september quarter due to customer site readiness issues.
-
the gains came at a cost.
-
the gross margin fell to 6.3%, down from 9.3% in the prior quarter, as expedited transportation expenses, component shortages, and the pricing leverage held by large-scale ai builders (one customer accounted for 63% of revenue) compressed profitability even as volume surged.
-
data center building block solutions should help offset margin pressure.
source: company earnings report, 2026
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What could go wrong
SMCI does not have a lot of room for error. One customer drove 63% of quarterly revenue, gross margin fell to 6.3%, and some of the revenue upside came from delayed shipments rather than purely fresh demand.
med
customer concentration
one customer accounted for 63% of last quarter's revenue. that's not a side note. that's the quarter.
if that customer slows orders, changes build schedules, or pushes harder on price, revenue and margin move together in the wrong direction.
med
margin compression
gross margin dropped to 6.3% from 9.3% in the prior quarter, while quarterly margin ran at 4.8%.
a three-point gross margin hit is painful in a low-margin hardware model. revenue growth can distract you for a quarter. earnings do not stay distracted.
med
shipment timing and execution
about $1.5B of the quarter came from shipments delayed out of the september quarter because customer sites were not ready.
that helped the reported quarter, but it also tells you the revenue line can swing around build schedules and site readiness instead of pure end-demand.
63% customer concentration and a 6.3% gross margin leave very little room for a bad quarter. the business is scaling fast. the cushion is not.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
gross margin recovery
6.3% gross margin is the key number now. if that stays stuck, the growth story stays louder than the earnings story.
risk
largest-customer concentration
63% from one customer is extreme. any reduction there changes the shape of the quarter immediately.
calendar
next earnings print
the next report needs to show whether $12.7B was clean demand, shipment timing, or both. that distinction matters more than the headline.
trend
fy2026 path to $42B
the street expects $42B in revenue this year. watch whether scale starts widening profit instead of just widening workload.
Analyst rankings
short-term outlook
below average
momentum score 4. in human-speak, analysts think the next 12 months look shakier than the average stock.
risk profile
below average
stability score 4 — safer than only 20% of stocks. if you own this, you own the swings too.
chart momentum
below average
technical score 4 — the market is not treating this like a clean uptrend right now.
earnings predictability
45 / 100
earnings predictability is weak. translation: the revenue story and the profit story are still arguing with each other.
source: institutional data
Institutional activity
276 buyers vs. 377 sellers in 4q2025. total institutional holdings: 0.3B shares.
source: institutional data
Price targets
3-5 year target range
$25
$81
$32
current price
$53
target midpoint · +66% from current · 3-5yr high: $105 (+230% · 35% ann'l return)
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