Super Micro Computer's (SMCI) Increased Full year Outlook Still Conservative

Super Micro Computer, Inc. (NASDAQ:SMCI) is one of the 10 undervalued growth stocks for the next 5 years. Super Micro Computer (NASDAQ:SMCI) is up over 10% since the earnings report on February 3. A major factor driving this sentiment is the CEO’s comment on the earnings call regarding the company’s $40 billion revenue target. He called the target a ‘conservative’ estimate and mentioned the supply chain as the major factor that could drive the revenue target upward.

In the second quarter, customer demand remained stronger, driven by larger data center operators and enterprise clients across global markets. One major data center customer contributed roughly 63% of the company’s total quarterly revenue. Revenue from the U.S. made up 82% of Q2 sales, indicating a sharp 184% year-over-year increase.

Management provided updated guidance pointing to continued momentum in the third quarter. Super Micro Computer, Inc. (NASDAQ:SMCI) expects Q3 net sales to reach at least $12.3 billion and increased its full-year 2026 revenue outlook to a minimum of $40 billion. CEO Charles Liang said that he is confident in delivering on the guidance.

Liang outlined the steps the company is taking to enhance profitability by stating:

We are also sharpening our focus on traditional enterprise, cloud, and edge IoT customers to further diversify revenue with higher margin.

Super Micro Computer, Inc. (NASDAQ:SMCI) is a seller and developer of server and storage solutions based on modular, open-standard architecture across Europe, the United States, Asia, and internationally. It provides liquid and air-cooled AI servers; SuperStorage systems; embedded (5G/IoT/Edge) systems; SuperBlade, MicroBlade, FlexTwin, GrandTwin, and BigTwin blade and multi-node systems; Hyper, CloudDC, and WIO and rackmount systems; and MicroCloud server systems.

While we acknowledge the potential of SMCI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.