Super Micro Computer Inc. SMCI designs, develops and manufactures server and storage systems optimized for artificial intelligence (AI)-powered data centers, cloud computing and edge computing workloads. The company’s solutions are based on its Server Building Block Solutions architecture.
SMCI’s fiscal 2026 revenues nearly doubled to $39.1 billion, while the company generated more than $60 billion in new orders during the fourth quarter, taking the backlog to record levels entering fiscal 2027.
The AI solutions represented about 60% of SMCI’s fourth-quarter fiscal 2026 revenues because several large projects shifted timing, but management expects AI-related solutions to exceed 80% of revenue going forward based on backlog.
The chart below shows the price performance of SMCI year-to-date.
Image Source: Zacks Investment Research
Modular Design Advantage
SMCI’s Building Block architecture remains central to its product-development model. This approach allows common server, storage, networking, power and cooling components to be reused across many system configurations. That can shorten design cycles when new CPUs and GPUs become available and supports customer-specific configurations without rebuilding the entire platform.
Management is also using factory automation, design optimization and standardized building blocks to raise manufacturing yields and streamline logistics. This combination of modular engineering and broad silicon support helps Super Micro Computer respond to shorter hardware cycles. It also supports the company’s strategy of offering application-optimized systems across enterprise, cloud, AI and edge workloads.
Transformation Toward a Complete AI Infra Provider
Super Micro Computer is moving beyond stand-alone servers toward complete Data Center Building Block Solutions (DCBBS). This strategy integrates GPU and CPU servers, enterprise storage, direct liquid cooling, power infrastructure, high-speed switches, networking, data-center management software and lifecycle services.
SMCI said the model is intended to reduce customer time-to-deployment and time-to-online by providing a more integrated data-center build. The company is also expanding software tools such as SuperCloud Composer, Super Micro Data Center Manager and Super Micro Orchestration Manager, while adding proactive service capabilities. Management expects more software features and service products to come online early in fiscal 2027, extending the DCBBS strategy beyond hardware integration.
Liquid Cooling Leadership
Rising rack density is increasing the importance of advanced cooling in AI data centers, and Super Micro Computer continues to expand direct liquid-cooling capabilities. SMCI is producing liquid-cooled rack-scale systems for current AI platforms and said most of its DLC production lines support dense 250kW-class racks.
Liquid cooling is integrated into the broader DCBBS portfolio alongside chilled doors, cooling distribution units and other infrastructure. This capability gives SMCI a broader role in high-density deployments as customers move from server purchases toward complete rack-scale systems.
Robust Clientele
Some of the largest customers of SMCI include NVIDIA Corp. NVDA, Advanced Micro Devices Inc. AMD and Intel Corp. INTC. The company is a big beneficiary of the booming AI-empowered hardware market.
In fourth-quarter fiscal 2026, the company shipped volume products across NVDA’s GB300 NVL72, HGX B300, B200 NVL4 and RTX 6000 Pro lines. SMCI is also preparing systems based on NVIDIA Vera Rubin and Vera CPU platforms.
Super Micro Computer launched AMD’s Helios product line and MI450 Total Solution while continuing to support MI350 and MI355X systems. Intel Xeon 6+ platforms are shipping in volume, and the company is developing systems for Arm-based AGI processors.
Strong Guidance
For the first quarter of fiscal 2027, Super Micro Computer expects net sales of $14.5-$15.5 billion, with non-GAAP adjusted earnings of $1.01-$1.10 per share. SMCI expects first-quarter fiscal 2027 non-GAAP gross margin to be between 10.4% and 10.8%, significantly below the unusually strong fourth-quarter level as customer and product mix normalizes.
For full-year fiscal 2027, SMCI expects net sales of $65-$72 billion compared with $39.1 billion in fiscal 2026. The outlook reflects continued AI infrastructure demand, record backlog and increasing contributions from enterprise, sovereign AI, NeoCloud and agentic AI opportunities.
Solid Estimate Revisions
Super Micro Computer has an expected revenue and earnings growth rate of 71.8% and 22%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 30.3% over the last 30 days.
SMCI has an expected revenue and earnings growth rate of 19.6% and 18.7%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 42.2% over the last 30 days.
Image Source: Zacks Investment Research
Attractive Valuation
Super Micro Computer is currently trading at an attractive valuation compared to its peers. The stock has a forward price/earnings (P/E) of 8.94X, compared with the industry’s P/E of 10.36X and the S&P 500’s P/E of 18.52X. It has a price/sale (P/S) of 0.67X, compared with the industry’s P/S of 5.32X and the S&P 500’s P/S of 3.09X. SMCI has a price/book (P/B) of 2.32X, significantly lower than the industry’s P/B of 16.38X and the S&P 500’s P/B of 3.71X.
Investment Thesis
SMCI currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The stock price has surged 35% year to date. Yet, SMCI is currently trading at a 32.6% discount to its 52-week high price level.
Image Source: Zacks Investment Research
Super Micro Computer remains positioned to benefit from expanding AI infrastructure demand, supported by rapid adoption of new GPU platforms, its modular Building Block architecture, liquid-cooling expertise and a broader DCBBS offering. SMCI’s strong customer partnership combined with record backlog, rising shipments and expanding product portfolio, positions the company to benefit in the long term.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report
Intel Corporation (INTC): Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).