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SMCI vs. AVT: Which AI Infrastructure Stock is a Better Buy?
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Key Takeaways
SMCI expects AI solutions to exceed 80% of revenue, supported by a record backlog entering fiscal 2027.
AVT's Electronic Components sales rose 49%, while data center and networking led end-market growth.
AVT's Farnell margin improved to 9%, adding a higher-margin earnings contributor alongside its core business.
Super Micro Computer (SMCI - Free Report) and Avnet Inc. (AVT - Free Report) are two prominent AI infrastructure support companies that serve different layers of the AI industry. While Super Micro Computer offers a broad portfolio of rack-scale Total IT Solutions, including complete servers, storage systems, blade servers, subsystems and server management software, Avnet distributes semiconductors and Interconnect, passive and electromechanical devices (IP&E) and provides supply chain management, inventory replenishment systems and engineering design services to the AI ecosystem.
With the AI industry growing, both stocks are set to benefit. So the question remains: Which stock has more upside potential? Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.
The Case for SMCI Stock
Super Micro Computer’s exposure to AI infrastructure remains a central growth driver. Fiscal 2026 revenues rose 78% to $39.1 billion, and management said more than $60 billion in new orders were received in the fourth quarter, leaving a record backlog entering fiscal 2027. AI solutions accounted for about 60% of fourth-quarter fiscal 2026 revenues because several large projects shifted timing. Management expects AI-related solutions to exceed 80% of revenues going forward based on backlog.
Super Micro Computer continues to emphasize early availability of new AI systems as a competitive advantage. In the fourth quarter of fiscal 2026, the company was shipping volume products across NVIDIA’s GB300 NVL72, HGX B300, B200 NVL4 and RTX 6000 Pro lines. It is also preparing systems based on NVIDIA Vera Rubin and Vera CPU platforms. With AMD, SMCI launched the Helios product line and the MI450 Total Solution, and with Intel, SMCI launched Xeon 6+ platforms.
SMCI is moving beyond stand-alone servers toward complete Data Center Building Block Solutions. DCBBS integrates GPU and CPU servers, enterprise storage, direct liquid cooling, power infrastructure, high-speed switches, networking, data-center management software and lifecycle services. The combination of modular engineering and broad silicon support helps Super Micro Computer respond to shorter hardware cycles.
With these tailwinds, SMCI has guided fiscal 2027 sales to be in the range of $65 billion to $72 billion and first-quarter sales to be between $14.5 billion and $15.5 billion. The Zacks Consensus Estimate for fiscal 2027 sales is pegged at $67.1 billion. Demand across AI training, inference, NeoCloud and sovereign deployments therefore remains the main foundation for Super Micro Computer’s longer-term expansion. The Zacks Consensus Estimate for SMCI’s first-quarter fiscal 2027 top line implies year-over-year growth of 194%.
Super Micro Computer’s profitability continues to vary sharply with customer and product mix. Non-GAAP gross margin rose to 17.6% in fourth-quarter fiscal 2026, up from 10.1% in the prior quarter. Management said about 75% of the sequential improvement came from favorable mix, including contracts that shifted into fiscal 2027. Lower tariff costs and inventory reserves accounted for the rest. For first-quarter fiscal 2027, management expects gross margin of only 10.4% to 10.8%, indicating that the fourth-quarter level might not persist in the upcoming quarter. The Zacks Consensus Estimate for SMCI’s fiscal 2027 earnings implies year-over-year growth of 202%. The Zacks Consensus Estimate for SMCI’s first-quarter fiscal 2027 earnings has remained unchanged for the past 30 days.
Image Source: Zacks Investment Research
The Case for AVT Stock
Avnet is positioned to benefit from the continued buildout of AI and data-center infrastructure through its broad electronic-component distribution and supply-chain capabilities. Data center and networking were among the leading end markets in the fourth quarter of fiscal 2026, with all end markets posting double-digit year-over-year and sequential growth. The combination of semiconductor, IP&E and embedded offerings gives Avnet exposure to the expanding component requirements associated with increasingly complex computing and networking systems.
Avnet participates across a broad component supply chain. AVT’s Electronic Components business generated $7.8 billion of fourth-quarter sales, up 49% year over year, while the company highlighted data center and networking among the key demand drivers. This breadth allows Avnet to capture component demand as AI systems require increasingly sophisticated computing, power, connectivity and networking architectures.
AI deployments are increasing demand not only for compute components but also for networking and connectivity products. Avnet's fourth-quarter results implied networking and data center as leading sources of end-market growth, while lead times were trending higher across most product categories and book-to-bill ratios remained above parity across all regions. These indicators point to firm underlying demand entering fiscal 2027.
Avnet's Farnell business provides an additional avenue to capture component demand as AI, networking and other technology applications expand. Farnell's fourth-quarter operating margin reached 9% compared with 5.2% in the prior quarter and 4.3% a year earlier. The improvement provides Avnet with a higher-margin earnings contributor alongside the larger Electronic Components business.
However, Avnet's opportunity is not dependent solely on AI spending. In fourth-quarter fiscal 2026, demand increased across all end markets, led by data center, networking, aerospace & defense and industrial applications. The Zacks Consensus Estimate for AVT’s fiscal 2027 earnings implies year-over-year growth of 240%. The Zacks Consensus Estimate for AVT’s first-quarter fiscal 2027 earnings has remained unchanged for the past 30 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of SMCI & AVT
Shares of SMCI and AVT have surged 41.9% and 104.3%, respectively, in the year-to-date period.
YTD Performance Chart
Image Source: Zacks Investment Research
AVT is trading at a forward 12-month Price-to-Sales ratio of 0.23X, higher than its median of 0.21X, while SMCI is trading at a forward sales multiple of 0.39X, below its median of 0.42X.
Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: SMCI vs. AVT Stock
AVT appears better positioned for a balanced risk-reward profile, supported by stronger earnings growth expectations, diversified end-market exposure and improving operating leverage. While SMCI offers significantly higher AI exposure and robust revenue growth, its profitability remains sensitive to product mix, with management expecting a sharp gross-margin decline in fiscal 2027.
AVT’s exposure to data center, networking, industrial and aerospace demand provides broader growth drivers, while improving Farnell margins and disciplined operations support earnings expansion. Given these factors, we consider AVT a safer bet right now. AVT and SMCI sport Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
View the Zacks #1 Rank List
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SMCI vs. AVT: Which AI Infrastructure Stock is a Better Buy?
Key Takeaways
Super Micro Computer (SMCI - Free Report) and Avnet Inc. (AVT - Free Report) are two prominent AI infrastructure support companies that serve different layers of the AI industry. While Super Micro Computer offers a broad portfolio of rack-scale Total IT Solutions, including complete servers, storage systems, blade servers, subsystems and server management software, Avnet distributes semiconductors and Interconnect, passive and electromechanical devices (IP&E) and provides supply chain management, inventory replenishment systems and engineering design services to the AI ecosystem.
With the AI industry growing, both stocks are set to benefit. So the question remains: Which stock has more upside potential? Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.
The Case for SMCI Stock
Super Micro Computer’s exposure to AI infrastructure remains a central growth driver. Fiscal 2026 revenues rose 78% to $39.1 billion, and management said more than $60 billion in new orders were received in the fourth quarter, leaving a record backlog entering fiscal 2027. AI solutions accounted for about 60% of fourth-quarter fiscal 2026 revenues because several large projects shifted timing. Management expects AI-related solutions to exceed 80% of revenues going forward based on backlog.
Super Micro Computer continues to emphasize early availability of new AI systems as a competitive advantage. In the fourth quarter of fiscal 2026, the company was shipping volume products across NVIDIA’s GB300 NVL72, HGX B300, B200 NVL4 and RTX 6000 Pro lines. It is also preparing systems based on NVIDIA Vera Rubin and Vera CPU platforms. With AMD, SMCI launched the Helios product line and the MI450 Total Solution, and with Intel, SMCI launched Xeon 6+ platforms.
SMCI is moving beyond stand-alone servers toward complete Data Center Building Block Solutions. DCBBS integrates GPU and CPU servers, enterprise storage, direct liquid cooling, power infrastructure, high-speed switches, networking, data-center management software and lifecycle services. The combination of modular engineering and broad silicon support helps Super Micro Computer respond to shorter hardware cycles.
With these tailwinds, SMCI has guided fiscal 2027 sales to be in the range of $65 billion to $72 billion and first-quarter sales to be between $14.5 billion and $15.5 billion. The Zacks Consensus Estimate for fiscal 2027 sales is pegged at $67.1 billion. Demand across AI training, inference, NeoCloud and sovereign deployments therefore remains the main foundation for Super Micro Computer’s longer-term expansion. The Zacks Consensus Estimate for SMCI’s first-quarter fiscal 2027 top line implies year-over-year growth of 194%.
Super Micro Computer’s profitability continues to vary sharply with customer and product mix. Non-GAAP gross margin rose to 17.6% in fourth-quarter fiscal 2026, up from 10.1% in the prior quarter. Management said about 75% of the sequential improvement came from favorable mix, including contracts that shifted into fiscal 2027. Lower tariff costs and inventory reserves accounted for the rest. For first-quarter fiscal 2027, management expects gross margin of only 10.4% to 10.8%, indicating that the fourth-quarter level might not persist in the upcoming quarter. The Zacks Consensus Estimate for SMCI’s fiscal 2027 earnings implies year-over-year growth of 202%. The Zacks Consensus Estimate for SMCI’s first-quarter fiscal 2027 earnings has remained unchanged for the past 30 days.
Image Source: Zacks Investment Research
The Case for AVT Stock
Avnet is positioned to benefit from the continued buildout of AI and data-center infrastructure through its broad electronic-component distribution and supply-chain capabilities. Data center and networking were among the leading end markets in the fourth quarter of fiscal 2026, with all end markets posting double-digit year-over-year and sequential growth. The combination of semiconductor, IP&E and embedded offerings gives Avnet exposure to the expanding component requirements associated with increasingly complex computing and networking systems.
Avnet participates across a broad component supply chain. AVT’s Electronic Components business generated $7.8 billion of fourth-quarter sales, up 49% year over year, while the company highlighted data center and networking among the key demand drivers. This breadth allows Avnet to capture component demand as AI systems require increasingly sophisticated computing, power, connectivity and networking architectures.
AI deployments are increasing demand not only for compute components but also for networking and connectivity products. Avnet's fourth-quarter results implied networking and data center as leading sources of end-market growth, while lead times were trending higher across most product categories and book-to-bill ratios remained above parity across all regions. These indicators point to firm underlying demand entering fiscal 2027.
Avnet's Farnell business provides an additional avenue to capture component demand as AI, networking and other technology applications expand. Farnell's fourth-quarter operating margin reached 9% compared with 5.2% in the prior quarter and 4.3% a year earlier. The improvement provides Avnet with a higher-margin earnings contributor alongside the larger Electronic Components business.
However, Avnet's opportunity is not dependent solely on AI spending. In fourth-quarter fiscal 2026, demand increased across all end markets, led by data center, networking, aerospace & defense and industrial applications. The Zacks Consensus Estimate for AVT’s fiscal 2027 earnings implies year-over-year growth of 240%. The Zacks Consensus Estimate for AVT’s first-quarter fiscal 2027 earnings has remained unchanged for the past 30 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of SMCI & AVT
Shares of SMCI and AVT have surged 41.9% and 104.3%, respectively, in the year-to-date period.
YTD Performance Chart
Image Source: Zacks Investment Research
AVT is trading at a forward 12-month Price-to-Sales ratio of 0.23X, higher than its median of 0.21X, while SMCI is trading at a forward sales multiple of 0.39X, below its median of 0.42X.
Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: SMCI vs. AVT Stock
AVT appears better positioned for a balanced risk-reward profile, supported by stronger earnings growth expectations, diversified end-market exposure and improving operating leverage. While SMCI offers significantly higher AI exposure and robust revenue growth, its profitability remains sensitive to product mix, with management expecting a sharp gross-margin decline in fiscal 2027.
AVT’s exposure to data center, networking, industrial and aerospace demand provides broader growth drivers, while improving Farnell margins and disciplined operations support earnings expansion. Given these factors, we consider AVT a safer bet right now. AVT and SMCI sport Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.