Super Micro Computer, Inc. (SMCI): A Bull Case Theory

We came across a bullish thesis on Super Micro Computer, Inc. (SMCI) on Deep Value Returns’ Substack. In this article, we will summarize the bulls’ thesis on SMCI. Super Micro Computer, Inc. (SMCI)'s share was trading at $41.15 as of 29^th May. SMCI’s trailing and forward P/E were 22.80 and 13.64 respectively according to Yahoo Finance.

Super Micro Computer (SMCI) presents a compelling long-term investment opportunity, with the potential to reach $60 per share by summer 2026. Despite a range of near-term challenges—including repeated target misses, management credibility concerns, customer delays, and ongoing tariff issues—these negatives are largely seen as backward-looking and already priced into the stock.

The core argument is that investors can capitalize not by focusing on current headwinds but by anticipating where the business is headed. SMCI is strategically positioned to benefit from secular trends in high-performance computing and AI infrastructure, and its business model is maturing into a more sustainable, cash-generative enterprise.

At just 22 times next year’s projected free cash flow, the valuation is notably attractive given the underlying fundamentals. This assumes a revenue base of approximately $25 billion and a healthy topline growth rate of 15% year-over-year—figures that are realistic and not overly optimistic. The company’s custom server solutions and focus on delivering high-efficiency, scalable systems position it well to capture increasing market demand from hyperscalers and enterprises investing in next-gen data infrastructure.

As SMCI continues to scale and execute, its growth trajectory should strengthen, driving operating leverage and enhanced profitability. With investor sentiment currently muted due to short-term noise, there is meaningful upside as fundamentals improve and confidence returns. Thus, despite headline risks, the long-term investment case remains intact, offering a favorable risk/reward setup for forward-looking investors willing to look past current volatility.

Previously, we have covered Super Micro Computer, Inc. (SMCI) in March 2025, wherein we summarized a bullish thesis by Taylor Nichols on Substack. The author highlighted the company’s rapid revenue growth, dominant position in AI infrastructure, and strong operational efficiency, despite past controversies and recent stock volatility. The article argued that SMCI’s undervaluation and strategic positioning in high-performance computing could drive significant upside, making it an attractive long-term investment. Since our last coverage, the stock is up 22.5% as of 29^th May.

Super Micro Computer, Inc. (SMCI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held SMCI at the end of the first quarter which was 45 in the previous quarter. While we acknowledge the potential of LYFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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