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Should You Hold or Fold Super Micro Computer Stock Before Q2 Earnings?

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Key Takeaways

  • SMCI expects Q2 revenues of $10-$11B, implying 83.95% growth from the year-ago quarter.
  • SMCI is benefiting from AI rack-scale systems, liquid cooling demand, and rich partnerships.
  • SMCI faces margin pressure, inventory and cash-cycle strain after ramping AI rack production.

Super Micro Computer, Inc. (SMCI - Free Report) is set to report its second-quarter fiscal 2026 results on Feb. 3, 2026, after market close.

For the fiscal second quarter, the company expects revenues between $10 billion and $11 billion. The Zacks Consensus Estimate is pegged at $10.4 billion, indicating growth of 83.95% from the year-ago quarter’s reported value.

Super Micro Computer expects non-GAAP earnings per share between 46 cents and 54 cents. The Zacks Consensus Estimate for earnings is pegged at 49 cents per share, suggesting a decline of 19.7% from the year-ago reported figure. The figure has remained unchanged over the past 30 days.

Zacks Investment Research
Image Source: Zacks Investment Research

SMCI’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing once, delivering an average surprise of 5.8%.

Super Micro Computer, Inc. Price and EPS Surprise

Super Micro Computer, Inc. Price and EPS Surprise

Super Micro Computer, Inc. price-eps-surprise | Super Micro Computer, Inc. Quote

Earnings Whispers for SMCI Stock

Our proven model does not conclusively predict an earnings beat for SMCI this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

SMCI has an Earnings ESP of 0.00%, and it currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Note Ahead of SMCI’s Q2 Results

Super Micro Computer’s second-quarter fiscal 2026 top line is likely to have benefited from the momentum in its rack-scale compute architecture that enterprises need for large-scale AI training, enterprise AI inference and training, visualization and design, content delivery and virtualization and AI edge. The traction in data center building blocks solutions and direct liquid cooling offerings is likely to have benefited SMCI in the second quarter of fiscal 2026.

SMCI’s partnerships with vendors like NVIDIA (NVDA - Free Report) and Advanced Micro Devices position the company to deliver the latest GPU-powered platforms, which remain in high demand among cloud providers and sovereign AI projects. Expansion in Europe, Asia and the Middle East offers additional growth avenues too. This is expected to have benefited SMCI in the to-be-reported quarter.

SMCI has  entered the client-edge consumer AI markets. SMCI’s expertise in AI-optimized servers, GPUs, and energy-efficient system design will help it deliver powerful yet compact solutions for PCs, edge AI, and embedded applications, challenging the incumbents. This new growth direction has increased SMCI’s total addressable market massively and is likely to have positively impacted SMCI in the second quarter of fiscal 2026.

However, this massive demand for SMCI’s AI rack systems has pushed SMCI to ramp up its operations in the past few months, causing working capital and inventory problems, allied with a lengthened cash conversion cycle. SMCI’s concentration with larger customers had earlier squeezed its margin and increased its receivables. These factors are likely to have remained a concern from the investors’ point of view in the to-be-reported quarter.

SMCI’s Price Performance & Stock Valuation

Super Micro Computer shares have gained 12.2% over the past year compared with the Zacks Computer – Storage Devices industry’s decline of 145.9%.

SMCI Trailing Twelve-Month Performance Chart

Zacks Investment Research
Image Source: Zacks Investment Research

Now, let us look at the value Super Micro Computer offers to its investors at current levels. Currently, SMCI is trading at a discount with a forward 12-month price-to-sales (P/S) of 0.45X compared with the industry’s 2.57X.

SMCI Forward 12-Month (P/S) Valuation Chart

Zacks Investment Research
Image Source: Zacks Investment Research

Investment Thesis for SMCI Stock

SMCI is emerging as a dominant force in AI infrastructure on the back of its liquid cooling technology, scalable manufacturing and broad AI product portfolio that is promising enough to drive sustained long-term growth. The latest announcement of ramping up the production of its latest AI data server solution that features NVIDIA’s Blackwell platform will boost Super Micro Computer’s revenue growth in the upcoming quarters.

Super Micro Computer’s new DCBBS simplifies how data centers are built. It combines servers, racks, power systems, cooling and networking into a complete package. This helps customers save up to 30% in total costs and build data centers faster, sometimes in weeks instead of months. The offering includes the company’s latest liquid cooling technology (DLC-2), which reduces power and water use.

SMCI has launched Super AI Station, Supermicro SYS-542T-2R, Supermicro AI PC, Supermicro Edge AI Systems and Supermicro's Fanless Compact Edge System with SMCI integrated NVIDIA Jetson Orin NX AI computer. This move into the client, edge and consumer market has brought it in crossroads with the existing players like HP Inc. (HPQ - Free Report) and Dell Technologies (DELL - Free Report) .

HP has a range of AI-based computing devices, like HP’s OmniBook and EliteBook series, which offer multiple Next-Generation AI PC solutions. Dell has numerous workstations that offer AI capabilities. Dell’s workstations are XPS 13, Inspiron 14 Plus, Inspiron 14, Latitude 7455 and Latitude 5455. Lenovo has AI PCs in some versions of ThinkPad, Yoga, IdeaPad, and Lenovo Legion.

Super Micro Computer is building and expanding production facilities worldwide, which makes its global footprint help the company respond to local demand, avoid tariffs and reduce delivery time. However, the company has suffered from shrinking gross margins for the past four quarters due to increased price competition, inventory write-downs of older-generation GPUs, and rising costs tied to product complexity and expanded services.

Conclusion: Hold SMCI Stock Now

Super Micro Computer is facing several near-term challenges while pursuing long-term growth across server, storage and cooling products. The company is entering Client, Edge and Consumer AI Markets, expanding its TAM. Considering these factors, we suggest that investors should retain SMCI stock for now.

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