Key Takeaways
- Super Micro shares are down 11% in the past week as AI hardware sold off after Intel’s and Amazon’s results, with Dell down even more.
- Super Micro’s September-quarter revenue came in at $19.9 billion, above the top of its own preliminary range.
- Management raised its fiscal 2027 revenue outlook to $72 billion to $82 billion, but operating cash flow was negative.
- At a fraction of its usual forward multiple, the stock looks cheap, if the cash starts coming in.
Super Micro Computer (SMCI) stock fell 11% between the Oct. 27 and Nov. 3 closes, about twice the Nasdaq 100’s 5% drop, with no bad news of its own.
AI hardware sold off after Intel (INTC) and Amazon reported on Oct. 29, stoking worries about AI spending. Intel fell 35% over the same stretch, and Dell Technologies (DELL), the server maker with the most similar exposure, fell 19%.
A $4 billion beat got even bigger
On Oct. 20, Super Micro said September-quarter revenue would land at $18.5 billion to $19.5 billion, about $4 billion above its own guidance. The final numbers came out after the close on Nov. 3 and were higher still: $19.9 billion of revenue, almost four times the year before, and a 12.7% gross margin, above both the 10.4%-10.8% guidance and the 12.0%-12.5% preliminary estimate. CEO Charles Liang called it “record revenue.” Management also raised its fiscal 2027 revenue outlook to $72 billion to $82 billion, from $65 billion to $72 billion.
Whatever the market feared last week, it didn’t show up in Super Micro’s sales.
Analysts already expected $70.3 billion of revenue for the year ending June 2027:
The new outlook’s $77 billion midpoint sits well above that, so those estimates have room to rise.
Intel and Dell took it harder
Intel’s quarter set off the selloff, but its warning centered on PCs. Its data center and AI revenue rose 78% to $7.3 billion, and it said demand for its data center chips is outrunning supply. Super Micro’s business is servers and storage, built around Intel’s processors, among others. Dell fell 10.77% on Oct. 30, the day after Intel reported, and its next report has to show that its AI server business held up as well as Super Micro’s.
TIKR tracks 18 analysts on Super Micro Computer. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Super Micro Computer, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Super Micro Computer’s Analyst Ratings
Still burning cash
Operating cash flow was negative $434 million in the quarter, after negative $7.0 billion of free cash flow in fiscal 2026. Inventory rose to $15.1 billion at Sept. 30, from $12.9 billion at June 30. Receivables climbed $3.6 billion as sales rose 79% from the June quarter, while a $3.1 billion jump in deferred revenue, cash collected before it is booked as sales, kept the outflow from being larger.
Priced like the boom is over
Super Micro traded at 6.4x forward earnings at the Nov. 2 close, against a five-year average of 15x:
The Street’s average target of $43 sits about 38% above the $31.39 Nov. 3 close.
That multiple looks too low for a company that just lifted its full-year revenue outlook by $8.5 billion at the midpoint.
Of course, Super Micro still has to turn those sales into cash. If operating cash flow is still negative when December-quarter results come out, expected in early February, investors will have good reason to keep the multiple low.
So what is Super Micro stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
