Trump’s bold-faced lie? (From Porter & Company)
Super Micro Computer Stock's Rally Backed by Strong Financials  Shares of Super Micro Computer Inc. (NASDAQ: SMCI) have been subject to significant volatility in recent months, largely due to negative headlines and other developments within the technology sector. However, most (if not all) of these negative outlooks have already been proven to be fixed and overcome, leaving an opportunity for current and prospective shareholders to take advantage of the upside.
With this in mind, the views on the broader semiconductor and chipmaking industry act as a significant tailwind for this company to push toward higher prices in the coming months. Connecting these broader themes at the industry level in the “top-down” analysis for Super Micro Computer will quickly turn to a “bottom-up” justification in the business fundamentals themselves. Investors can justify potential new positions in the company through a brief financial analysis and by considering potential catalysts in the future. Additionally, the high short interest in the stock acts as an upside tail risk, as the possibility of a short squeeze remains relevant for this stock’s future. This is what the industry looks like today. The Upcycle in Semiconductors Has Begun The industry dynamic in this space is made up of two primary cycles. The first is the research and development cycle, where companies spend time (and capital) developing the latest technology and products to be rolled out in the future. The second cycle is the sales cycle, where these new products are then rolled out into the market and adoption takes effect. As it stands today, with companies like NVIDIA Co. (NASDAQ: NVDA) rolling out their Blackwell super semiconductor in the latest quarter, investors might safely assume that the sales cycle is about to enter the industry. Since Super Micro Computer’s heat efficiency products are directly linked to Blackwell, this creates a tailwind for the stock. At a fundamental level, any success in NVIDIA’s new product will be reflected in new orders and demand for Super Micro Computer as well. That lays the foundation for better financial performance in the coming months, which, of course, will also tie in to better valuations. Momentum and Projections for Super Micro Computer According to the latest quarterly financial data, Super Micro Computer reported revenues of up to $4.6 billion, indicating an annual growth rate of as much as 19%. More than a fantastic quarter, the new momentum from the industry’s sales cycle has given management the confidence to forecast more growth. The outlook for the fourth quarter of 2025 is expected to be between $5.6 billion and $6.4 billion in revenues, indicating another quarter of double-digit growth that will aid in a higher valuation and momentum for the stock moving forward. Revenue, however, is vanity; cash flow itself is reality, and this is what that looks like for Super Micro Computer. Operating cash flow was reported at $795.9 million for the quarter, a significant jump from the net operating cash flow of $1.8 billion during the same quarter last year. This is the lifeblood of today’s industry theme, showing that Super Micro Computer was more focused on product development than collecting cash through sales last year. This year’s quarter reflects the broader impact of the sales cycle, generating attractive cash flow figures that justify a year-to-date performance of up to 46%, outperforming both the broader technology sector and the S&P 500 index. However, these numbers are likely already priced in; now, investors need to focus on the future. The Market’s Take on Super Micro Computer’s Future Wall Street analysts now expect to see up to $0.94 in earnings per share (EPS) for the fourth quarter of 2025, which means a jump of 203% from today’s reported $0.31 in EPS. Now, that is exactly the sort of momentum in bottom-line earnings that investors want to see when developing their buying views. As most are aware, the stock price generally follows the underlying EPS growth. This time, Wall Street analysts are aligned with the broader industry cycle and the future developments expected to come to Super Micro Computer as a result of NVIDIA’s successful launch of Blackwell. This setup might explain why institutional allocators from Inspire Investing decided to boost their holdings in Super Micro Computer stock by 19% as of early June 2025, bringing their net position to a high of $2.5 million today. While this may not be the largest positioning, investors need to know that the momentum that has been and likely will continue in the stock might attract further institutional buying. Written by Gabriel Osorio-Mazilli Read this article online › Featured Articles: Did you like this article?  
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