Nasdaq:SMCI posts solid Q3 revenue on AI-infrastructure demand
Super Micro Computer (NASDAQ:SMCI) closed Friday at $60.12 following its announcement of $4.6 billion in third-quarter sales, a 19 percent year-over-year increase despite coming in 2.8 percent below consensus. The shortfall reflected timing shifts as customers awaited Nvidia’s Blackwell GPUs, rather than any demand erosion, and management expects the deferred $400 million of orders to ship in Q4 and early FY 2026.
Liquid-cooled and Blackwell systems drive inventory monetization
Entering Q4 with $3.9 billion of inventory on hand—equivalent to 81 days of supply—SMCI’s pipeline is primed for a major shipment surge. The firm’s pioneering B200 HGX and GB200 NVL72 liquid-cooled servers have been complemented by B300/GB300 Blackwell-optimized platforms, positioning the company to exceed its own guidance of at least $6 billion in Q4 revenue, up from the implied $5.98 billion midpoint of full-year targets.
$20 billion DataVolt partnership accelerates global footprint
Super Micro’s aggressive expansion includes over 30 Blackwell-based AI solutions launched across Europe as of June 2025, slashing deployment lead times from 12–18 months to just three. Its multi-year, $20 billion collaboration with DataVolt will supply ultra-dense GPU clusters to hyperscale AI campuses in the U.K., Saudi Arabia and the U.S., further amplifying production leverage and revenue visibility.
Cash flow recovery and prudent leverage underpin growth
After a working-capital–driven dip in FY 2024, SMCI generated $626.8 million of operating cash flow in Q1 2025, flipping to a positive net cash position post-financing. Debt-to-equity stands at a conservative 42 percent, with interest coverage above 27x, metrics that compare favorably against HPE and Dell, underscoring the company’s capacity to self-fund expansion.
Valuation reflects discounted premium with upside to $81
Trading near 16x forward EV/EBITDA and 18x forward P/E—below historical norms—SMCI’s valuation accommodates accelerated margin recovery. Analysts forecast $3.25 of EPS in FY 2026, implying a price target of $81.25 at a 25x multiple, or over 35 percent upside. Even the conservative $1.97 EPS scenario supports a floor near $49, limiting downside to approximately 18 percent.
Transitional risks from GPU cycles and tariffs temporarily pressure margins
Order delays ahead of Nvidia’s Blackwell rollout account for $400–$500 million of Q3 shortfall, while U.S. tariffs of 10 percent may impose $200–$300 million in annualized cost headwinds. Gross margins contracted to 14.8 percent in FY 2024 from 17.6 percent a year earlier, but management expects a rebound as AI hardware mix shifts back to higher-margin solutions.
Insider purchases and governance clarity boost confidence
Key executives acquired 25,000 SMCI shares at an average of $58.50 following Nasdaq compliance notification, signaling conviction in the company’s trajectory. Detailed insider transactions are available here: https://www.tradingnews.com/Stocks/SMCI/stock_profile/insider_transactions
Technical setup shows support around $55 with resistance at $66
The weekly chart reveals a series of higher highs from the late-June low of $45 to this week’s $62 high. The 50-day moving average near $55 has held on pullbacks, while $66 marks the next upside barrier. RSI momentum remains constructive, suggesting room for an extension as fundamental catalysts unfold.
Strategic outlook: accumulate NASDAQ:SMCI on dips toward $58
Given the clear Q4 shipment ramp, reinforced balance sheet and discount-to-growth valuation, buy on retracements to $58–$60, targeting resistance at $66–$70. A failure to defend $55 would warrant a reappraisal.
