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Super Micro Computer, Inc. transforms the backbone of modern digital infrastructure by delivering cutting-edge server and storage solutions that power cloud computing, AI, and 5G technologies worldwide. Renowned for its modular, open architecture and high-performance products, Supermicro leads the computer hardware industry with innovation and quality. As its market valuation faces pressures amid evolving tech demands, I explore whether Supermicro’s fundamentals still support its growth trajectory and justify investment consideration.
Table of contents
Business Model & Company Overview
Super Micro Computer, Inc., founded in 1993 and headquartered in San Jose, California, stands as a leading innovator in the computer hardware industry. The company delivers a cohesive ecosystem of high-performance server and storage solutions, leveraging modular and open architecture to serve enterprise data centers, cloud computing, AI, 5G, and edge computing markets globally. Its product suite ranges from complete servers and racks to specialized software, creating a comprehensive infrastructure platform.
The company’s revenue engine balances robust hardware sales with recurring software and support services, including server management suites and ongoing technical assistance. With strategic operations spanning the Americas, Europe, and Asia, Super Micro Computer maximizes its global footprint. Its ability to integrate cutting-edge technology with scalable service offerings builds a durable economic moat, positioning it at the forefront of shaping the future of digital infrastructure.
Financial Performance & Fundamental Metrics
In this section, I analyze Super Micro Computer, Inc.’s income statement, key financial ratios, and dividend payout policy to assess its financial health and investment potential.
Income Statement
The table below presents Super Micro Computer, Inc.’s income statement figures for fiscal years 2021 through 2025, reflecting key performance metrics in USD.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Revenue | 3.56B | 5.20B | 7.12B | 14.99B | 21.97B |
| Cost of Revenue | 3.02B | 4.40B | 5.84B | 12.93B | 19.54B |
| Operating Expenses | 411M | 463M | 522M | 851M | 1.18B |
| Gross Profit | 535M | 800M | 1.28B | 2.06B | 2.43B |
| EBITDA | 149M | 376M | 800M | 1.27B | 1.33B |
| EBIT | 121M | 343M | 765M | 1.23B | 1.27B |
| Interest Expense | 2.49M | 6.41M | 10.49M | 19.35M | 59.57M |
| Net Income | 112M | 285M | 640M | 1.15B | 1.05B |
| EPS | 0.55 | 1.21 | 2.17 | 1.77 | 1.77 |
| Filing Date | 2021-08-27 | 2022-08-29 | 2023-08-28 | 2025-02-25 | 2025-08-28 |
Income Statement Evolution
From 2021 to 2025, Super Micro Computer, Inc. experienced significant revenue growth of 518%, reaching $21.97B in 2025. Net income rose even more sharply by 838%, though it declined in the most recent year. Gross and net margins improved overall, with the gross margin holding steady at 11.06% and net margin at 4.77%, indicating relative stability despite rapid expansion.
Is the Income Statement Favorable?
In 2025, the company delivered $21.97B in revenue, a 47% increase year-over-year, with gross profit growing 18%. Operating expenses rose proportionally, maintaining a neutral EBIT margin of 5.79%. However, net margin declined nearly 38%, offsetting EPS growth, which remained flat at $1.77. Interest expense was low at 0.27% of revenue, a favorable factor. Overall, the fundamentals present a generally favorable income statement profile.
Financial Ratios
The following table presents key financial ratios for Super Micro Computer, Inc. (SMCI) over recent fiscal years, providing insight into profitability, valuation, liquidity, leverage, and operational efficiency:
| Ratios | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 3.1% | 5.5% | 9.0% | 7.7% | 4.8% |
| ROE | 10.2% | 20.0% | 32.5% | 21.3% | 16.6% |
| ROIC | 8.7% | 13.0% | 26.3% | 14.5% | 9.3% |
| P/E | 16.2 | 7.5 | 21.7 | 41.8 | 27.7 |
| P/B | 1.7 | 1.5 | 7.0 | 8.9 | 4.6 |
| Current Ratio | 1.9 | 1.9 | 2.3 | 3.8 | 5.2 |
| Quick Ratio | 0.9 | 0.9 | 1.3 | 2.0 | 3.3 |
| D/E | 0.11 | 0.44 | 0.15 | 0.40 | 0.76 |
| Debt-to-Assets | 5.3% | 19.4% | 7.9% | 22.2% | 34.1% |
| Interest Coverage | 49.9 | 52.6 | 72.6 | 62.6 | 21.0 |
| Asset Turnover | 1.6 | 1.6 | 1.9 | 1.5 | 1.6 |
| Fixed Asset Turnover | 12.1 | 18.2 | 24.5 | 36.2 | 27.5 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Evolution of Financial Ratios
From 2021 to 2025, Super Micro Computer, Inc. showed fluctuating trends in key ratios. Return on Equity (ROE) increased significantly from 10.2% in 2021 to 21.3% in 2024, then declined to 16.6% in 2025, indicating some volatility in profitability. The Current Ratio improved steadily, rising from 1.93 to 5.25, suggesting growing liquidity. Debt-to-Equity Ratio increased from 0.11 in 2021 to 0.76 in 2025, reflecting higher leverage over the period.
Are the Financial Ratios Fovorable?
In 2025, profitability ratios were mixed: ROE at 16.6% was favorable, while net margin and P/E ratio were unfavorable. Liquidity showed a high current ratio of 5.25 (unfavorable) but a quick ratio of 3.25 (favorable), indicating good short-term asset coverage. Leverage ratios like debt-to-equity (0.76) and debt-to-assets (34.1%) were neutral. Efficiency ratios such as asset turnover (1.57) and fixed asset turnover (27.53) were favorable. Overall, the financial ratios present a neutral profile.
Shareholder Return Policy
Super Micro Computer, Inc. (SMCI) does not pay dividends, reflecting a reinvestment strategy focused on growth rather than immediate shareholder payouts. The company has maintained a zero dividend payout ratio and yield consistently, while cash generation remains positive, supporting operational and capital expenditures.
There is no indication of share buyback programs in recent fiscal years. This approach aligns with prioritizing capital retention to fuel expansion and innovation, which may support sustainable long-term value creation for shareholders, assuming continued profitability and efficient cash flow management.
Score analysis
Below is a radar chart illustrating the various financial scores assigned to Super Micro Computer, Inc., providing a snapshot of its valuation and financial metrics:
The company shows favorable scores in return on equity and return on assets, both rated 4, indicating strong profitability metrics. However, the discounted cash flow and debt to equity scores are very unfavorable at 1, suggesting concerns in cash flow valuation and leverage. Price to earnings and price to book ratios are moderate, scoring 2 each.
Analysis of the company’s bankruptcy risk
The Altman Z-Score places Super Micro Computer, Inc. in the safe zone, indicating a low risk of bankruptcy based on its financial ratios and stability:
Is the company in good financial health?
The following Piotroski diagram depicts the company’s financial health based on key accounting criteria:
With a Piotroski Score of 4, Super Micro Computer, Inc. is considered to have average financial health, reflecting moderate strength but leaving room for improvement in profitability and efficiency measures.
Competitive Landscape & Sector Positioning
This sector analysis will examine Super Micro Computer, Inc.’s strategic positioning, revenue segments, key products, main competitors, and competitive advantages. I will also conduct a SWOT analysis to assess strengths, weaknesses, opportunities, and threats. The goal is to determine whether Super Micro Computer, Inc. holds a competitive advantage over its industry rivals.
Strategic Positioning
Super Micro Computer, Inc. focuses on a concentrated product portfolio dominated by server and storage systems, generating $21.3B in 2025, with a smaller subsystems segment at $660M. Geographically, it maintains diversified exposure, with the US as the primary market at $13.1B, followed by Asia and Europe at $5.5B and $2.7B respectively.
Revenue by Segment
This pie chart displays Super Micro Computer, Inc.’s revenue distribution by segment for the fiscal year 2025, highlighting the contributions of key product lines.
The dominant revenue driver in 2025 is the Server And Storage Systems segment, generating $21.3B, which shows substantial growth compared to $14.2B in 2024 and $6.6B in 2023. Subsystems and accessories contributed significantly less at $660M, marking a decline from $804M in 2024. The data reflects a strong acceleration in core server and storage sales, with increasing concentration risk as this segment accounts for the vast majority of total revenue.
Key Products & Brands
The following table presents Super Micro Computer, Inc.’s main product categories and their descriptions:
| Product | Description |
|---|---|
| Server and Storage Systems | High performance server and storage solutions based on modular and open architecture, including complete servers, blade servers, racks, and networking devices. |
| Subsystems and Accessories | Server subsystems and accessories such as server boards, chassis, power supplies, and other components supporting server and storage systems. |
| Server Software Management | Software solutions including Server Management Suite with tools like Supermicro Server Manager, Power Management, Update Manager, SuperCloud Composer, and SuperDoctor 5. |
| Integration and Support Services | Services for system integration, configuration, upgrades, technical documentation, training, and ongoing maintenance and support for server and storage products. |
Super Micro Computer, Inc. focuses on delivering modular, high-performance server and storage hardware alongside comprehensive software and support services, catering to enterprise data centers and emerging technology markets.
Main Competitors
There are 12 competitors in total within the Computer Hardware industry; here are the top 10 leaders by market capitalization:
| Competitor | Market Cap. |
|---|---|
| Arista Networks, Inc. | 168B |
| Dell Technologies Inc. | 85.7B |
| Western Digital Corporation | 65.2B |
| Seagate Technology Holdings plc | 61.1B |
| Pure Storage, Inc. | 21.9B |
| NetApp, Inc. | 21.3B |
| HP Inc. | 20.7B |
| Super Micro Computer, Inc. | 18.4B |
| IonQ, Inc. | 15.9B |
| D-Wave Quantum Inc. | 9.1B |
Super Micro Computer, Inc. ranks 8th among its main competitors with a market cap at 11.25% of the leader, Arista Networks. It is positioned below both the average market cap of the top 10 competitors (48.7B) and the sector median (20.9B). The company maintains a 9.26% market cap gap from its nearest competitor above, HP Inc.
Comparisons with competitors
Check out how we compare the company to its competitors:
Does SMCI have a competitive advantage?
Super Micro Computer, Inc. currently shows a slightly unfavorable competitive advantage, as its ROIC is below its WACC, indicating value destruction despite a growing ROIC trend. The company has stable gross and net margins with favorable revenue growth, reflecting operational resilience.
Looking ahead, SMCI is positioned to benefit from expanding markets such as enterprise data centers, cloud computing, AI, 5G, and edge computing. Its broad product portfolio, including modular server solutions and management software, supports potential growth opportunities across multiple regions.
SWOT Analysis
This SWOT analysis highlights key internal and external factors affecting Super Micro Computer, Inc. (SMCI) to guide informed investment decisions.
Strengths
- Strong revenue growth with 46.6% increase in 1 year
- Robust geographic diversification, especially in the US and Asia
- High return on equity at 16.64%
Weaknesses
- Moderate net margin at 4.77% with recent decline
- Elevated valuation multiples (PE 27.74, PB 4.62)
- Current ratio unusually high at 5.25, indicating potential inefficiency
Opportunities
- Expanding markets in AI, 5G, and edge computing
- Rising demand for modular and open architecture server solutions
- Increasing profitability trend with growing ROIC
Threats
- Intense competition in computer hardware sector
- Price volatility with beta above 1.5
- Potential margin pressure from rising operational costs
Overall, SMCI shows strong growth potential supported by market expansion and solid geographic reach but must address margin pressures and valuation risks. Investors should weigh growth opportunities against profitability challenges in their strategy.
Stock Price Action Analysis
The weekly price chart of Super Micro Computer, Inc. (SMCI) highlights significant price movements and volatility over the past 12 months:
Trend Analysis
Over the past 12 months, SMCI’s stock price declined by 64.99%, indicating a bearish trend. The price fell from a high of 114.0 to a low of 18.58, with volatility measured by a standard deviation of 21.55. The bearish trend shows deceleration, suggesting the downward momentum is slowing.
Volume Analysis
Trading volumes over the last three months show seller dominance, with seller volume at 1.07B versus buyer volume of 487M. The volume trend is decreasing, reflecting reduced market participation and cautious investor sentiment amid continued price declines.
Target Prices
Analysts present a cautiously optimistic target consensus for Super Micro Computer, Inc.
| Target High | Target Low | Consensus |
|---|---|---|
| 64 | 26 | 49.71 |
The target prices suggest moderate upside potential with some risk, reflecting a balanced outlook from the analyst community.
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Analyst & Consumer Opinions
This section examines the latest analyst ratings and consumer feedback related to Super Micro Computer, Inc. (SMCI).
Stock Grades
The following table presents the latest verified grades for Super Micro Computer, Inc. from recognized financial institutions as of late 2024:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Equal Weight | 2024-10-02 |
| Loop Capital | Maintain | Buy | 2024-09-23 |
| JP Morgan | Downgrade | Neutral | 2024-09-06 |
| Barclays | Downgrade | Equal Weight | 2024-09-04 |
| Barclays | Maintain | Overweight | 2024-08-28 |
| Wells Fargo | Maintain | Equal Weight | 2024-08-28 |
| CFRA | Downgrade | Hold | 2024-08-28 |
| Goldman Sachs | Maintain | Neutral | 2024-08-08 |
| Wells Fargo | Maintain | Equal Weight | 2024-08-07 |
| Rosenblatt | Maintain | Buy | 2024-08-07 |
The overall trend shows a predominance of hold and equal weight ratings, reflecting cautious sentiment among analysts with some downgrades from previous overweight or buy positions. This mixed pattern suggests a balanced view on the stock’s near-term prospects.
Consumer Opinions
Consumers of Super Micro Computer, Inc. (SMCI) express a mix of satisfaction and concerns, reflecting the company’s strengths and areas for improvement.
| Positive Reviews | Negative Reviews |
|---|---|
| Excellent product performance and reliability | Customer service response times can be slow |
| Competitive pricing compared to industry peers | Occasional issues with software compatibility |
| Robust build quality and customizable options | Limited availability of some newer product models |
| Strong focus on energy-efficient solutions | Documentation and user manuals sometimes unclear |
Overall, consumers appreciate SMCI’s reliable, cost-effective products and customization options. However, recurring critiques focus on customer support delays and occasional software or documentation challenges.
Risk Analysis
The following table summarizes key risks associated with Super Micro Computer, Inc., highlighting probability and potential impact:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | The stock price has a beta of 1.532, indicating higher sensitivity to market swings. | High | High |
| Valuation Risk | Unfavorable P/E (27.74) and P/B (4.62) ratios suggest potential overvaluation. | Moderate | Moderate |
| Profitability | Low net margin of 4.77% and zero dividend yield may indicate limited profit distribution. | Moderate | Moderate |
| Debt Management | Debt-to-equity ratio is moderate (0.76) with favorable interest coverage (21.34), but some risk remains. | Low | Moderate |
| Financial Health | Altman Z-Score (4.38) indicates low bankruptcy risk; Piotroski Score (4) is average, signaling moderate financial strength. | Low | Low |
| Competitive Risk | Operating in highly competitive tech hardware sector with rapid innovation cycles. | Moderate | High |
The most significant risks are market volatility due to a beta above 1.5, and valuation concerns from above-average P/E and P/B ratios. While the company is financially stable with a strong Altman Z-Score, modest profitability and average Piotroski Score suggest caution. Investors should monitor tech sector dynamics and valuation closely.
Should You Buy Super Micro Computer, Inc.?
Super Micro Computer, Inc. appears to be demonstrating improving profitability and operational efficiency, supported by a moderately favorable leverage profile, despite a slightly unfavorable moat suggesting some value erosion. Its overall B- rating could be seen as reflecting a balanced risk-return profile for investors.
Strength & Efficiency Pillars
Super Micro Computer, Inc. (SMCI) displays solid profitability with a return on equity of 16.64% and a favorable interest coverage ratio of 21.34, underscoring efficient debt servicing. The Altman Z-score of 4.38 places the company comfortably in the safe zone, reflecting strong financial health. While the Piotroski score of 4 denotes average financial strength, operational metrics such as asset turnover at 1.57 and fixed asset turnover at 27.53 highlight operational efficiency. Despite a neutral ROIC of 9.26% slightly below the WACC of 9.59%, SMCI sustains a moderate value creation profile.
Weaknesses and Drawbacks
SMCI’s valuation metrics indicate potential overvaluation risks, with a high price-to-earnings ratio of 27.74 and a price-to-book ratio of 4.62, both flagged as unfavorable. The current ratio at 5.25, though typically a sign of liquidity, is marked unfavorable here, possibly indicating inefficient use of working capital. The recent market behavior shows seller dominance with buyers constituting only 31.38%, reinforcing short-term selling pressure. Furthermore, the net margin of 4.77% is considered unfavorable, and the company carries a moderate debt-to-equity level of 0.76, which might weigh on financial flexibility.
Our Verdict about Super Micro Computer, Inc.
Super Micro Computer, Inc.’s long-term fundamental profile appears moderately favorable, supported by strong financial health and operational efficiency. However, the bearish overall stock trend, coupled with recent seller dominance, suggests caution. Despite underlying strengths, this combination might indicate that investors could benefit from a wait-and-see approach to identify a more advantageous entry point before committing to exposure.
Disclaimer: This content is for informational purposes only and does not constitute financial, investment, or other professional advice. Investing in financial markets involves a significant risk of loss, and past performance is not indicative of future results.
Additional Resources
- Super Micro Computer: I Think It Should Finally Explode On Earnings (Preview) (SMCI) – Seeking Alpha (Jan 22, 2026)
- SMCI’s Server and Storage Segmental Revenues Surge: What Lies Ahead? – Yahoo Finance (Jan 22, 2026)
- Super Micro Computer’s AI Orders Are There – Delivery Is The Bottleneck (Downgrade) (SMCI) – Seeking Alpha (Jan 22, 2026)
- ‘Super Micro Computer Is Priced For Failure’: Why I Disagree (NASDAQ:SMCI) – Seeking Alpha (Jan 22, 2026)
- Jim Cramer on Super Micro: “Sell, I Don’t Need That” – Yahoo Finance (Jan 22, 2026)
For more information about Super Micro Computer, Inc., please visit the official website: supermicro.com
