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Will SMCI's Next-Generation Products Fuel Long-Term Growth?
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Key Takeaways
SMCI is first to ship NVIDIA B300 & GB300 AI systems, launching over 30 new NVIDIA- and AMD-based solutions.
New DLC-2 reduces power and water use by up to 40%, cuts costs 20%, and operates at lower noise levels.
SMCI expands manufacturing in Silicon Valley, Taiwan, the Netherlands, and Mexico to meet surging AI demand.
Super Micro Computer‘s (SMCI - Free Report) next-generation server platforms, storage offerings, and direct liquid cooling (DLC) racks are experiencing massive traction as enterprises and hyperscalers scale out, increasing AI deployments and improving time-to-market.
SMCI is capitalizing on this trend by being the first to ship next-generation AI systems, such as the NVIDIA B300 and GB300. SMCI has also expanded its Data Center offerings with the introduction of Data Center Building Block Solutions (DCBBS), which is a modular architecture designed for speedier deployment of AI data center buildouts.
SMCI has also introduced DLC-2, which lowers power and water consumption by up to 40%, operates at significantly reduced noise levels of approximately 50 decibels, and reduces the total cost of ownership by 20%.
Furthermore, SMCI has launched more than 30 new solutions optimized for the latest NVIDIA and AMD architectures. SMCI is well-positioned to benefit from strategic partnerships to build hyperscale AI campuses globally, along with the expectation that more than 30% of global new data center deployments will adopt liquid cooling solutions in the next 12 months.
On the execution front, SMCI is scaling its global manufacturing capacity to meet demand, with a third Silicon Valley campus underway, expansion in Taiwan and the Netherlands, and a new facility in Mexico. SMCI’s 2026 and 2027 revenues are expected to grow at 48% and 15%, respectively, per the Zacks Consensus Estimate.
How Competitors Fare Against SMCI
Super Micro Computer’s next-generation products face intense competition from Hewlett Packard Enterprise (HPE - Free Report) and Dell Technologies (DELL - Free Report) , which provide solutions like liquid cooling and advanced AI servers.
Hewlett Packard Enterprise entered the AI infrastructure space with a modular, performance-optimized data center solution that offers AI and high-performance computing features and supports its Private Cloud AI. This offers liquid-cooled HPC and AI servers through its HPE Cray and Apollo systems.
Dell offers liquid cooling architectures through its Apex and PowerEdge platforms. Dell has designed its AI server solutions to be custom and modular by adding both air and liquid cooling features with 24-hour rack deployment turnaround and end-to-end deployment services. These key differentiators make its server easy to deploy, hence encouraging smoother adoption.
SMCI’s Price Performance, Valuation and Estimates
Shares of SMCI have gained 50.4% year to date compared with the Zacks Computer- Storage Devices industry’s growth of 36.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, SMCI trades at a forward price-to-sales ratio of 0.85X, down from the industry’s average of 1.7X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SMCI’s fiscal 2025 earnings implies a year-over-year decline of 23%, while the same for fiscal 2026 indicates growth of 29%. The estimates for fiscal 2026 and 2027 have been revised downward in the past 60 days.
Image: Bigstock
Will SMCI's Next-Generation Products Fuel Long-Term Growth?
Key Takeaways
Super Micro Computer‘s (SMCI - Free Report) next-generation server platforms, storage offerings, and direct liquid cooling (DLC) racks are experiencing massive traction as enterprises and hyperscalers scale out, increasing AI deployments and improving time-to-market.
SMCI is capitalizing on this trend by being the first to ship next-generation AI systems, such as the NVIDIA B300 and GB300. SMCI has also expanded its Data Center offerings with the introduction of Data Center Building Block Solutions (DCBBS), which is a modular architecture designed for speedier deployment of AI data center buildouts.
SMCI has also introduced DLC-2, which lowers power and water consumption by up to 40%, operates at significantly reduced noise levels of approximately 50 decibels, and reduces the total cost of ownership by 20%.
Furthermore, SMCI has launched more than 30 new solutions optimized for the latest NVIDIA and AMD architectures. SMCI is well-positioned to benefit from strategic partnerships to build hyperscale AI campuses globally, along with the expectation that more than 30% of global new data center deployments will adopt liquid cooling solutions in the next 12 months.
On the execution front, SMCI is scaling its global manufacturing capacity to meet demand, with a third Silicon Valley campus underway, expansion in Taiwan and the Netherlands, and a new facility in Mexico. SMCI’s 2026 and 2027 revenues are expected to grow at 48% and 15%, respectively, per the Zacks Consensus Estimate.
How Competitors Fare Against SMCI
Super Micro Computer’s next-generation products face intense competition from Hewlett Packard Enterprise (HPE - Free Report) and Dell Technologies (DELL - Free Report) , which provide solutions like liquid cooling and advanced AI servers.
Hewlett Packard Enterprise entered the AI infrastructure space with a modular, performance-optimized data center solution that offers AI and high-performance computing features and supports its Private Cloud AI. This offers liquid-cooled HPC and AI servers through its HPE Cray and Apollo systems.
Dell offers liquid cooling architectures through its Apex and PowerEdge platforms. Dell has designed its AI server solutions to be custom and modular by adding both air and liquid cooling features with 24-hour rack deployment turnaround and end-to-end deployment services. These key differentiators make its server easy to deploy, hence encouraging smoother adoption.
SMCI’s Price Performance, Valuation and Estimates
Shares of SMCI have gained 50.4% year to date compared with the Zacks Computer- Storage Devices industry’s growth of 36.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, SMCI trades at a forward price-to-sales ratio of 0.85X, down from the industry’s average of 1.7X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SMCI’s fiscal 2025 earnings implies a year-over-year decline of 23%, while the same for fiscal 2026 indicates growth of 29%. The estimates for fiscal 2026 and 2027 have been revised downward in the past 60 days.
Image Source: Zacks Investment Research
SMCI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here