SMCI Deepens its AI-Centric Server Expertise: Will it Deliver Growth?

Super Micro Computer SMCI has launched a series of AI-centric products to address both hyperscale data center and edge computing demands. These products include new edge systems like ARS-111L-FR, ARS-E103-JONX and SYS-212D-64C-FN8P.

SMCI also introduced new product families like SuperBlade and MicroBlade high-density server systems focused on AI inference, visual computing, EDA, data analytics, HPC, cloud, and enterprise workloads, per a press release issued by the company.

Additionally, SMCI launched two other edge systems on display, including SYS-112D-42C-FN8P and ARS-E103-JONX, which have the NVIDIA Jetson Orin NX AI computer integrated into them.

To better serve its customers' AI data center infrastructure deployment and time to online, SMCI has introduced a data center building block solution, integrating NVIDIA and AMD’s high performance chipsets in its servers.

On fourth-quarter fiscal 2025 earnings call, SMCI reported that its fiscal 2025 results represented 47% year-over-year revenue growth, reaching $22 billion and attributed this growth to the strong demand for its AI and green computing solutions.

How Competitors Fare Against SMCI

The global storage and server market is dominated by players like Pure Storage PSTG and Hewlett Packard Enterprise HPE. Pure Storage provides a range of modern storage solutions through its offerings like FlashArray, FlashBlade and Pure Cloud Block Store to serve the purpose of providing All-Flash performance, cloud integration, AI and simplified management.

Hewlett Packard Enterprise offers a range of server services, including HPE ProLiant, HPE Synergy, HPE BladeSystem and HPE Moonshot servers. In the second quarter of fiscal 2025, Hewlett Packard Enterprise’s server segment sales grew 6% year over year due to strong demand for its AI servers.

Per a report by Mordor Intelligence, the enterprise server market is expected to witness a CAGR of 8.03% from 2025 to 2030 and reach $139.81 billion. Given the huge opportunity in the space, players like Super Micro, Pure Storage and Hewlett Packard Enterprise are poised to witness tremendous growth.

SMCI’s Price Performance, Valuation and Estimates

Shares of SMCI have gained 92.6% year to date against the Zacks Computer- Storage Devices industry’s growth of 56.3%.

From a valuation standpoint, SMCI trades at a forward price-to-sales ratio of 1.08X, down from the industry’s average of 1.92X.

The Zacks Consensus Estimate for SMCI’s fiscal 2026 earnings implies a year-over-year growth of 23%, and the same for fiscal 2027 indicates growth of 29%. The estimates for fiscal 2025 and 2026 have been revised downward in the past 60 days.

SMCI currently carries a Zacks Rank #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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