SMCI · Super Micro Computer
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $36.96
Note written ·
Price against the kill line
27.3% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $36.96, on record since 11 November 2026. The shares are down 29.8% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $36.96, the 50-day average of closes as of 11 November 2026, which would show the shares leading the S&P 500; December-quarter sales above the $21.5 billion top of the guide with gross margin above 12.5% would also prove the call wrong.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 6 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 19,946
- Revenue, change on a year (%)
- +297.5
- Gross margin (%)
- 12.7
- Operating margin (%)
- 10.4
- Free cash flow, four quarters ($M)
- −6,498
- Net cash, cash less debt ($M)
- 2,936
- Price to earnings (×)
- 4.8
- Enterprise value to sales (×)
- 0.3
All filed numbers
What Super Micro Computer reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 19,946 | +297.5 | 12.7 | 10.4 |
| first filed | 11,120 | +93.2 | 17.5 | 13.4 |
| first filed | 10,243 | +122.7 | 9.9 | 6.1 |
| first filed | 12,683 | +123.4 | 6.3 | 3.7 |
| first filed | 5,018 | −15.5 | 9.3 | 3.6 |
| first filed | 5,757 | +7.5 | 9.5 | 4.0 |
| Pre-tax income ($M) | 2,031 |
| Net income ($M) four quarters: 3,656 | 1,594 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +13.0 |
| Operating cash flow ($M) | −6,326 |
| Capital spending ($M) | 171 |
| Free cash flow ($M) | −6,498 |
| Cash and short-term investments ($M) | 6,913 |
| Debt ($M) | 3,977 |
| Net cash, cash less debt ($M) | 2,936 |
| Deferred revenue ($M) +451.1% on a year | 5,666 |
| Backlog, orders not yet delivered ($M) +451.1% on a year | 5,666 |
| Receivables ($M) | 9,685 |
| Inventory ($M) | 15,054 |
| Shareholders' equity ($M) | 16,069 |
| Market value ($M) | 17,710 |
| Enterprise value, market value plus net debt ($M) | 14,775 |
| Enterprise value to sales (×) | 0.3 |
| Enterprise value to operating income (×) | 3.2 |
| Price to earnings (×) | 4.8 |
| Price to book value (×) | 1.1 |
| Free-cash-flow yield (%) | −36.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 12.2% of shares outstanding sold short, 2.6 days of average trading to cover, −8.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $50K | $12.2M |
| 12 monthsfrom | $50K | $15.7M |
The thesis
Super Micro Computer's shares are more likely to lag the S&P 500 over the next three months. Record sales arrived with a 12.7% gross margin, one customer at 44% of revenue, and a new China export-control report on 10 November 2026. The December-quarter result, guided at $19.5–21.5 billion of sales and a 12.0–12.5% gross margin, settles whether growth can outrun those costs.
The company reported fiscal first-quarter 2027 results on 3 November 2026. Net sales of $19,945.8 million rose 298% from a year earlier. Adjusted earnings per share were $1.81 against a $1.23 estimate, per 24/7 Wall St. The company also raised fiscal 2027 sales guidance to $72–82 billion. The shares closed at $29.60 on 4 November 2026, the first session after the report, and at $30.43 on 11 November 2026.
The rating is Low because the price has fallen while estimates rose. The shares are down 22.3% over three months on adjusted daily closes, and they trade below both their 50-day and 200-day averages. Investors are paying less for each dollar of the raised guidance, and the margin and export-control questions explain why.
Bullish and bearish views on Super Micro Computer, Inc.
The bull case on Super Micro Computer, Inc. (SMCI), in brief: sales beat the company's own range. The bear case: one customer is 44% of sales.
Bull case
- Sales beat the company's own range. Net sales of $19,945.8 million topped the $18.5–19.5 billion preliminary range the company gave on 20 October 2026. AI solutions were about 71% of revenue against 59%, per 24/7 Wall St on 4 November 2026.
- Guidance rose for the full year. Fiscal 2027 sales guidance moved to $72–82 billion from $65–72 billion on 3 November 2026. December-quarter adjusted earnings per share are guided at $1.66–$1.90 against a $1.14 estimate.
- Customers are prepaying. Deferred revenue rose about $3.1 billion in the September quarter, mostly customer prepayments, per 24/7 Wall St. Raymond James raised its price target to $65 from $48 and kept Outperform after the report, according to Stocktwits.
- A director bought shares. Director Scott Angel bought 1,715 shares at $29.12 on 6 November 2026, per an SEC Form 4 filed 10 November 2026. The purchase is small next to the company's share count.
- New AMD server line is shipping. The company said on 11 November 2026 that it had begun shipping its H15 servers built on AMD's sixth-generation EPYC 9006 processors. That widens sales beyond NVIDIA-based AI racks.
Bear case
- One customer is 44% of sales. The chief financial officer said one large data-center customer made up 44% of first-quarter revenue, against 28% for fiscal 2026. Two customers held 49% and 17% of accounts receivable, per 24/7 Wall St on 4 November 2026.
- Gross margin fell sharply. GAAP gross margin was 12.7% in the September quarter, down from 17.5% in the June quarter. The company guides fiscal 2027 gross margin to 11.8–12.2%.
- Cash flow was negative. Operating cash flow was negative $434 million and free cash flow negative $481 million in the September quarter, per 24/7 Wall St. The same outlet said about $2.3 billion of revenue came from deployments first scheduled for earlier periods.
- Export-control exposure returned. Benzinga tied the 10 November 2026 decline to a report that Chinese AI startup Moonshot AI had rented 32 Supermicro servers with NVIDIA B300 processors through offshore arrangements; NVIDIA denied breaching US export controls. Federal prosecutors charged three people tied to the company in March 2026 over an alleged $2.5 billion server diversion to China, per The Register.
- Bears raised targets but stayed bearish. Susquehanna kept its Negative rating and raised its target to $18 from $15 on 10 November 2026. Bank of America kept Underperform with a $39 target on 4 November 2026.
- Founders sold at higher prices. Chief executive Charles Liang and director Sara Liu each sold 100,000 shares at $45.02 on 7 October 2026 and 200,000 shares at an average $38.59 on 3 September to 4 September 2026, under Rule 10b5-1 plans, per SEC Form 4 filings.
Price setup
The shares closed at $30.43 on 11 November 2026, 40.8% below the 52-week intraday high of $51.40 set on 2 June 2026. The 52-week closing low is $20.53 from 20 March 2026. The 3-month reference close was $39.16 on 13 August 2026.
As of 11 November 2026, the 200-day average of adjusted closes stands at $32.58, and the 50-day average sits higher still. The last close is below both. The shares closed at $27.08 on 5 November 2026, their lowest close since the report, then moved between $27.79 and $30.43 through 11 November 2026.
The 11 November 2026 session added 9.5%, per a Defense World report on 12 November 2026, as more than a dozen AI stocks rose over 10% that day, per Benzinga. A close back above the 200-day average would be the first sign that buying has outlasted a single group rally. The 50-day average is the line the call is judged against.
Catalysts ahead
- 17 November 2026: NVIDIA fiscal Q3 2027 results and 5:00 p.m. ET call. NVIDIA's rack supply and demand commentary feeds directly into Supermicro's December-quarter sales and margin.
- 9 December 2026: Federal Reserve rate decision. AI hardware shares have moved with Treasury yields; a hawkish signal would weigh on the group.
- ~2 February 2027 (est.): Fiscal Q2 2027 (December quarter) results. Shows whether sales land inside the $19.5–21.5 billion guide and gross margin holds the 12.0–12.5% range, and whether one customer still dominates revenue.
What would change the view
A daily close above $36.96, the 50-day average of closes as of 11 November 2026, which would show the shares leading the S&P 500; December-quarter sales above the $21.5 billion top of the guide with gross margin above 12.5% would also prove the call wrong.
What it trades with
Supermicro trades with AI hardware as a group. On 11 November 2026 it rose alongside CoreWeave and other AI names, and NVIDIA traded lower before the 12 November 2026 open, per a Benzinga pre-market report. NVIDIA supply and rack demand drive its revenue, and memory prices drive its cost.
Two exposures are its own. The export-control case and the 10 November 2026 Moonshot AI report move the shares on days peers do not move. A GraniteShares leveraged single-stock fund launched on 1 June 2026 amplifies daily swings in both directions.
The evidence, claim by claim (8)
- Fiscal Q1 2027 net sales $19,945.8 million, up 298% year over year; adjusted EPS $1.81 versus a $1.23 estimate; AI solutions about 71% of revenue versus 59%. 24/7 Wall St, 4 November 2026, citing the Q1 FY27 report · as of
- GAAP gross margin 12.7% versus 17.5% in the June quarter; fiscal 2027 gross margin guided 11.8–12.2%. Supermicro Q1 FY27 results and prepared remarks · as of
- One large data-center customer was 44% of Q1 FY27 revenue versus 28% for fiscal 2026; two customers held 49% and 17% of accounts receivable. 24/7 Wall St, 4 November 2026 · as of
- Fiscal 2027 net sales guidance raised to $72–82 billion from $65–72 billion; December-quarter sales guided at $19.5–21.5 billion. Supermicro Q1 FY27 results release · as of
- Operating cash flow negative $434 million and free cash flow negative $481 million in the September quarter; deferred revenue up about $3.1 billion, mostly prepayments. 24/7 Wall St, 4 November 2026 · as of
- Susquehanna kept a Negative rating and raised its price target to $18 from $15. Susquehanna research note, reported 10 November 2026 · as of
- Director Scott Angel bought 1,715 shares in the open market at $29.12 on 6 November 2026. SEC Form 4 filed 10 November 2026 · as of
- CEO Charles Liang and director Sara Liu each sold 100,000 shares at $45.02 on 7 October 2026 under Rule 10b5-1 plans. SEC Form 4 filings, 9 October 2026 · as of
Sources
- This One Customer Is Now 44% of Super Micro's Revenue · 247wallst.com ·
- Supermicro Announces First Quarter of Fiscal Year 2027 Financial Results · finviz.com
- FQ127 Prepared Remarks · s204.q4cdn.com
- Why Is SMCI Stock Falling on Tuesday? · benzinga.com
- Super Micro Computer: Susquehanna raises target price to $18 from $15 · rallies.ai
- Super Micro Computer (NASDAQ:SMCI) Stock Jumps 9.5% on Insider Buying Activity · defenseworld.net ·
- Supermicro co-founder arrested, charged over $2.5B Nvidia GPU sales to China · theregister.com ·
- NVIDIA Sets Conference Call for Third-Quarter Financial Results · nvidianews.nvidia.com
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