That chorus of groans you might have heard earlier this week just might have been coming from investors in Super Micro Computer (NASDAQ:SMCI), which reported its Fourth Quarter Fiscal Year 2025 numbers on August 5 after the market closed.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Needless to say, the market was not thrilled by both top- and bottom-line misses, as SMCI’s revenues of $5.76 billion came up short by $156.37 million while its EPS Non-GAAP of $0.41 was $0.03 less than analysts had predicted. Moreover, the company’s EPS Non-GAAP guidance for Q1 FY 2026 of $0.40 to $0.52 fell short of the $0.59 that analysts had been expecting.
The reaction was swift, and furious. SMCI’s share price is down almost 20% since the earnings were reported, a concrete demonstration of the market’s disappointment.
One top investor known by the pseudonym The Techie doesn’t think things are quite as bad as they might seem.
“Despite margin pressure and high expectations, I see the current selloff as a buying opportunity given strong AI-driven demand and undervalued valuation multiples,” explains the 5-star investor, who is among the top 3% of TipRanks’ stock pros.
For one thing, the company is expecting to deliver “solid” revenues of $33 billion for FY 2026. The AI tailwinds are set to continue blowing, further details the investor, with Nvidia’s Blackwell likely to experience growing demand from the U.S., Europe, and Asia during the coming two years. The Techie points out that Supermicro will likely play a large role in this rollout.
“With a global manufacturing footprint and major hyperscaler clients, SMCI is set for over 50% revenue growth in FY26 as AI data center demand accelerates,” The Techie adds.
When it comes to the company’s valuation, the investor notes that SMCI is trading at discounted multiples. For instance, its Forward Price-to-Sales multiple of 1.54x is significantly less than the sector median of 3.07x – despite the expected revenue growth up ahead.
In short, The Techie urges investors to focus on the horizon instead of getting sidetracked by the most recent numbers.
“Yes, we had some underwhelming earnings, but Supermicro’s long-term growth story remains intact,” concludes The Techie, who rates SMCI a Buy. (To watch The Techie’s track record, click here)
Wall Street offers a more mixed picture. With 5 Buys, 7 Holds, and 2 Sells, SMCI has a Hold (i.e. Neutral) consensus rating. Its 12-month average price target of $46.69 implies minimal movement in the year ahead. (See SMCI stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.