SMCI Earnings: Why I’m Still Holding (and Might Even Add More)

It’s been a hell of a year for Super Micro Computer (NASDAQ: SMCI). The stock is up almost 100% YTD and still trading ~15% off its 2024 highs. It’s one of those names that lives between retail euphoria and deep institutional conviction. With earnings just around the corner (August 5), and the market heating up again on AI infrastructure demand, I figured it’s time to share my full take — no sugarcoating, no hype.

What the Market’s Reacting To

SMCI popped over 7% heading into earnings — not because of anything concrete in the numbers, but because expectations are heating up. Nvidia’s $4T valuation run has lit a fire under the entire AI stack. Supermicro, which builds high-density, liquid-cooled AI servers with Nvidia GPUs, is smack in the middle of that value chain.

Institutional money has noticed. TCW Group disclosed a $7.36M position. That’s not a whale, but it adds to the sentiment: people are getting in before the Q4 results. The market seems to believe the worst is behind us — including the accounting mess from last year — and that SMCI is set up for another run.

A Quick Look Back: From Hero to Fraud (and Back Again?)

Supermicro’s rise and fall (and rise again) is a wild chart. The company ran to $114 a share in early 2024 on liquid-cooled server hype. Then the wheels came off — their auditor quit, filings got delayed, and “fraud” got thrown around like candy on Reddit.

What really happened? SMCI had accounting control issues. Not fraud. Their legacy internal systems buckled under explosive growth. Eventually, a new auditor came in, the 10-K was filed, and the company laid out its plan to fix things: hire more staff and clean up internal processes. It's messy. But it's also fixable. And that’s the crux of the value thesis here — if you believe they’ve got it under control, the upside is enormous.

The AI Thesis Still Holds

Let’s get real — SMCI isn’t Nvidia. It’s not a sexy LLM play. But it’s indispensable if you’re trying to build or scale AI infrastructure. Their systems pack Nvidia’s chips tighter and more efficiently than almost anyone else. That’s why Digi Power X just signed on for a deployment that supports over 10,000 Nvidia GPUs, starting Q4 2025.

That’s Tier-3 certified AI infra. This is not some startup fluff — this is real CapEx, real demand. Add in their $2.3B convertible bond raise (to expand capacity), and you’ve got a company gearing up to meet a wave of demand from xAI, OpenAI, Meta, and whoever else decides they don’t want to rent forever from AWS.

And let’s not forget: SMCI’s CEO is calling for $40 billion in revenue in 2026. That’s not just hopeful talk — the Malaysian facility going live this year is a huge part of that roadmap.

Europe Is a Question Mark

A big chunk of the bull case now hinges on SMCI’s European expansion and participation in “Sovereign AI.” It’s a powerful narrative, but it also comes with serious risk.

Are we building data centers for the sake of building data centers? — SAP CEO Christian Klein

He’s got a point. European demand isn’t there yet. Regulation is messy (AI Act incoming), energy infra is constrained, and funding for EU-based AI startups isn’t nearly as liquid as in the U.S. Nvidia wants to ignite the EU’s AI game, and SMCI is betting on it. But that’s a bet, not a certainty.

Valuation: Still a Bargain?

Let’s talk numbers.

• P/E: ~18
• Forward P/E: ~14
• 2024 Revenue: ~$15B
• 2025 Projection: ~$24B
• 2026 Guidance: ~$40B

Even with that growth, SMCI trades at a 15.7x EBITDA multiple — nearly in line with the broader tech sector (15.6x). If they don’t screw up, that’s cheap. If they execute, this is a $100+ stock again. Easily.

Technical Analysis: Am I Buying, Holding, or Selling?

Let’s break this down in plain English.

• SMCI is in recovery mode. The weekly chart shows the stock putting in higher lows since the post-scandal washout.
• Volume is confirming the move. Trading activity picked up significantly in July, especially on green candles.
• We’re still 15% below the 52-week high. That’s good. There’s room to run, and it’s not a momentum top.

Right now, I’m holding. I’ve been in this stock a while, and I’m not dumping it before earnings — not when the macro picture is aligning so cleanly. If we get a post-earnings pullback into the low $50s, I’ll probably add.

When would I sell? If:

1. They post another internal controls disaster.
2. Europe completely stalls and guidance gets slashed.
3. The stock spikes parabolically into unsustainable valuation levels (~30x forward P/E).

This isn’t a “sleep at night” stock like MSFT. This is a stock you check nervously on earnings day. But for those who held through the chaos (or bought the fear), the reward might just be worth it.

The good old days aren’t back yet — but they might be loading. 

SMCI is volatile, controversial, and not for the faint of heart. But if you’ve got conviction — and the stomach — it’s still one of the best pure-play infrastructure bets on the AI buildout.

This isn’t a “sleep at night” stock like MSFT. This is a stock you check nervously on earnings day. But for those who held through the chaos (or bought the fear), the reward might just be worth it.

The good old days aren’t back yet — but they might be loading.