New York, Jan 20, 2026, 09:06 EST
- Seeking Alpha contributor Uttam Dey notes Super Micro is trading around 0.5 times forward sales and may be poised for a shift in gross margin
- Zacks maintains a Hold rating, citing ongoing operational challenges and sustained margin pressure despite robust AI demand
- On Friday, shares closed at $32.64, rising roughly 11% amid a wider rally linked to AI and increased chip spending plans
Super Micro Computer is drawing attention again before Tuesday’s U.S. market open, following a Seeking Alpha note that called the AI server maker undervalued despite strong demand for AI hardware.
The timing is crucial as the stock has swung wildly between enthusiasm for AI infrastructure and doubts over profitability. The question now isn’t if AI servers will sell, but whether Super Micro can turn a solid profit from them.
Super Micro, headquartered in San Jose, California, manufactures servers for data centers, specializing in high-density systems powered by graphics processing units, or GPUs — the chips crucial for AI workloads. Despite this focus, the company’s stock remains well below its pre-2024 10-for-1 stock split prices, according to analysis from Zacks.
In a Seeking Alpha article out late Monday, contributor Uttam Dey noted that Super Micro “trades at just 0.5x forward sales,” referring to its expected revenue over the next year. He pointed to market doubts fueled by pressure on gross margins — the portion of revenue remaining after direct production and shipping costs — but suggested a product mix shift could bring stability. “I recommend trading Super Micro’s shares due to a coming pivot in their gross margins,” Dey wrote. Seekingalpha
Dey also highlighted the disparity between Super Micro and bigger players like Dell, noting that book value and revenue multiples point to a contrarian opportunity. Dell, a major force in enterprise servers, is ramping up its AI server efforts as clients expand their compute capabilities.
Shares surged roughly 11% last Friday, closing at $32.64, following a boost in Taiwan Semiconductor Manufacturing Co’s 2026 capital spending plan. The rise lifted AI-related stocks, according to an Insider Monkey report published on Yahoo Finance. Yahoo
A separate note from Zacks last week took a more cautious stance, suggesting Super Micro’s decline wasn’t driven by AI demand but by real worries over execution and profitability that might be justified. The report flagged issues like scaling production, inventory buildup, and persistent margin pressure. Despite these concerns, the stock remains at a Zacks Rank #3 (Hold). Zacks
Zacks pointed out the ongoing split in forecasts. Some estimates predict sales will surge in fiscal 2026, but near-term earnings growth looks subdued. Analyst price targets in the short run varied significantly, the report noted.
Competition adds pressure. Super Micro’s systems occupy a central spot in an AI supply chain led by chipmakers like Nvidia and AMD, alongside server competitors willing to sacrifice margins for market share — all factors that squeeze profits throughout the industry.
The bull case hinges on a payoff that isn’t certain. Should gross margins remain depressed, or if the company has to keep slashing prices just to secure deals, those cheap-looking multiples might stay stubbornly low. On top of that, poor cash flow would pile on more pressure.
Investors are now eyeing earnings as the next trigger. According to Zacks, the company will release its fiscal second-quarter results on Feb. 24. That report could either support the view that the stock is “underrated” or reignite skepticism that has kept its valuation low.
