- SMCI missed revenue estimates for the Dec’24 quarter and also revenue guidance estimates for Mar’25 and FY25. But I am bullish due to a 65% growth outlook for FY26.
- Margin erosion is a headwind and although there are positive catalysts ahead associated with new Blackwell products, I am unsure about whether those margin boosts would be permanent.
- Valuations have corrected sharply closer to longer-term averages. SMCI stock trades at a ~30% premium to those averages currently, but this is justified given >60% YoY growth ahead.
- Relative technicals on SMCI vs SPX500 show bullish strength ahead as the buyers react strongly off a key support level.
- Management has unequivocally assured investors that they would meet the 25 Feb ’25 deadline to catch up on delayed filings. There are also no changes to previously reported financials. I think this is lifting an overhang on the stock. It seems opportune to buy before 25 Feb.
Performance Assessment
Super Micro Computer (NASDAQ:SMCI) has significantly outperformed the S&P500 (SPY) (SPX) (IVV) (VOO) since my last update on the stock: Providing alpha-generating investment ideas. I am an independent investor managing my family’s portfolio, primarily via a Self Managed Super Fund. You can expect my articles to deliver a clearly structured, evidence-based thesis. But first and foremost, I encourage readers to judge me on my performance.I have a generalist approach as I explore, analyze and invest in any sector so long there is perceived alpha potential vs the S&P500. The typical holding period ranges between a few quarters to multiple years.It is a good idea to review the ratings history for the articles published by authors. This gives you another indication of how often the author’s recommendations work out, which is a proxy for genuine investing and alpha-generating skill.Associated with Seeking Alpha account VishValue Research.
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