Group 1 - Super Micro Computer (NASDAQ: SMCI) is currently trading at approximately $45, significantly higher than the $32 price at which a 'Strong buy' recommendation was made in February [1] - The analyst has a long position in SMCI shares, indicating a beneficial interest in the company's stock [2] - The article emphasizes the importance of fundamental analysis and the balance between risk and reward in investment decisions [1] Group 2 - The analyst aims to provide clear and accessible insights for investors of all experience levels, leveraging an IT background to navigate technology stocks [1] - The pursuit of knowledge extends beyond technology, exploring diverse sectors for promising investment opportunities [1] - The article invites both seasoned and novice investors to engage in collaborative exploration and analysis of the market [1]

Core Insights - Super Micro Computer, Inc. (SMCI) has announced advancements in its Direct Liquid Cooling (DLC) solution, which significantly enhances cooling efficiency for AI and data center applications [1][2][3] Group 1: Technology Improvements - The new DLC-2 solution can reduce data center power consumption by up to 40% compared to traditional air-cooled systems [1][2] - The solution allows for higher liquid inflow temperatures, accommodating up to 45°C, which eliminates the need for chilled water and reduces water consumption by up to 40% [5][7] - The design includes comprehensive cold plate coverage for various components, which lowers fan speeds and reduces noise levels to approximately 50dB [1][7] Group 2: Cost Efficiency - The total cost of ownership for data centers utilizing the DLC-2 solution can decrease by up to 20% [1][2] - The innovative design and efficient liquid circulation enable faster deployment and reduced time-to-online for AI infrastructure [1][7] Group 3: System Specifications - The new architecture features a GPU-optimized server that includes eight NVIDIA Blackwell GPUs and two Intel® Xeon® 6 CPUs within a compact 4U rack height [3] - The in-rack Coolant Distribution Unit (CDU) can remove up to 250kW of heat per rack, enhancing overall cooling capacity [4] Group 4: Market Positioning - Supermicro aims to make liquid cooling more accessible, targeting a market where liquid-cooled data centers are expected to account for 30% of all installations [2][6] - The company provides a comprehensive suite of solutions, including liquid-cooling technologies, networking, and data center management software [7][9]

Market Overview - US stock index futures are all up before the market opens, with Dow futures up 0.05%, S&P 500 futures up 0.20%, and Nasdaq futures up 0.34% [1] - European indices show mixed performance, with Germany's DAX down 0.31%, UK's FTSE 100 up 0.03%, France's CAC40 down 0.43%, and the Euro Stoxx 50 down 0.33% [2][3] - WTI crude oil is down 1.10% at $62.97 per barrel, while Brent crude oil is down 1.04% at $65.94 per barrel [3][4] Economic Insights - April's Consumer Price Index (CPI) unexpectedly cooled to 2.3% year-on-year, down from 2.4% in March, but analysts warn that the impact of tariffs has yet to be reflected in the data [4] - Morgan Stanley's chief economist suggests that the true effects of tariffs will become evident in upcoming months, with inflation pressures expected to rise [4] - Goldman Sachs estimates that the core Personal Consumption Expenditures (PCE) inflation rate could rise from 2.6% in March to 3.6% by the end of the year [4] Stock Market Predictions - Citigroup and JPMorgan predict short-term gains by investing in the worst-performing stocks of the year, particularly small-cap stocks and technology hardware [4] - UBS has downgraded its rating on US stocks from "attractive" to "neutral," citing concerns over rapid market increases and ongoing uncertainties [5] Currency and Trade - A potential long-term "dollar bear market" is anticipated, driven by chaotic trade policies and the impact of tariffs on investor confidence [6] - Analysts suggest that institutional investors are recalibrating their portfolios, which may lead to significant selling pressure on the dollar [6] Company News - Nvidia and AMD have secured significant contracts in the Middle East, with Nvidia exporting 18,000 advanced AI chips to Saudi Arabia and AMD entering a $10 billion partnership [8] - Tesla plans to resume importing components from China for its Cybercab and Semi truck production, indicating a positive impact from easing trade tensions [9] - Sony's Q4 results were mixed, with a sales decline but a net profit increase, and it announced a ¥250 billion stock buyback plan despite warning of a ¥100 billion profit loss due to tariffs [10] - Supermicro has entered a $20 billion partnership with DataVolt to deliver high-density GPU platforms for AI data centers in Saudi Arabia and the US, leading to a significant pre-market stock increase [11]

Group 1: Automotive Sector - Li Auto (09863) saw a rise of over 4%, with record order volume during the May Day holiday and recent share purchases by the chairman [1] - XPeng Motors (09868) increased by over 3%, becoming the first Chinese new energy vehicle company to participate in the Milan Design Week and officially entering the Italian market [1] - The rare earth sector surged, with Jinli Permanent Magnet (06680) rising over 5% due to export controls leading to increased overseas rare earth prices [1] Group 2: E-commerce and Health - JD Group (09618) rose over 4%, reporting Q1 revenue of 301.1 billion yuan, a 15.8% year-on-year increase, and a net profit of 10.89 billion yuan, up 52.73% [2] - JD Health (06618) increased over 4%, with revenue of 16.645 billion yuan, a 25.5% year-on-year growth, and operating profit of 1.071 billion yuan, up 119.8% [2] Group 3: Music and Entertainment - Tencent Music (01698) rose over 12%, reporting total revenue of 7.36 billion yuan and adjusted net profit of 2.23 billion yuan, with online music service revenue growing by 15.9% [2] - NetEase Cloud Music (09899) increased over 11%, with analysts noting a positive growth phase in the online music industry due to improved competition and user willingness to pay [3] Group 4: Technology and AI - Baidu Group (09888) rose over 3%, planning to launch its Apollo Go autonomous taxi service in Switzerland and Turkey [3] - NuScale Power (SMR.US) reported quarterly sales of 13.4 million, significantly exceeding analyst expectations, leading to a rise of over 21% [6] Group 5: Shipping and Logistics - Shipping stocks collectively strengthened, with Pacific Shipping (02343) and Seaspan (01308) rising over 6%, and China Merchants Energy (02866) increasing over 12% [4]

Group 1 - The Pragmatic Investor focuses on global macro, international equities, commodities, tech, and cryptocurrencies, aiming to guide investors of all levels [1] - The platform offers features such as a portfolio, weekly market updates, actionable trades, technical analysis, and a chat room for investor engagement [1] - James Foord, an economist with a decade of experience in global market analysis, leads The Pragmatic Investor, emphasizing the importance of building diversified portfolios to preserve and increase wealth [1]

SAN JOSE, Calif., May 13, 2025 /PRNewswire/ -- Supermicro, Inc. (NASDAQ: SMCI), a Total IT Solution Provider for AI, Cloud, Storage, and 5G/Edge, is announcing that a number of Supermicro servers are now shipping with the latest addition to the AMD based EPYC™ 4000 series CPUs, the AMD EPYC™ 4005 Series processors. These servers are optimized to deliver a powerful balance of performance density, scalability, and affordability. Supermicro will feature its new Supermicro MicroCloud multi-node solution, a 10-n ...

Financial Performance - Net sales increased by 19.5% to $4,599.9 million for the three months ended March 31, 2025, compared to $3,850.1 million for the same period in 2024[213]. - Gross margin decreased to 9.6% in the three months ended March 31, 2025, down from 15.5% in the same period of 2024[213]. - Operating expenses rose by 33.9% to $293.4 million for the three months ended March 31, 2025, compared to $219.1 million in 2024[213]. - Net income for the three months ended March 31, 2025, was $108.8 million, a decrease from $402.5 million in the same period of 2024[207]. - For the three months ended March 31, 2025, net sales increased by $749.8 million, or 19.5%, driven by higher demand for GPU servers, HPC, and rack-scale solutions[234]. - Server and storage systems net sales for the three months ended March 31, 2025, reached $4,458.9 million, a 20.6% increase from $3,698.5 million in the same period of 2024[228]. - Net income for the three months ended March 31, 2025, was 2.4% of revenue, down from 10.5% in the same period of 2024[226]. - Net sales in Asia increased by $589.7 million, or 77.1%, for the three months ended March 31, 2025, primarily due to growth in Japan and Thailand[234]. Expenses and Costs - The cost of sales for the three months ended March 31, 2025, was $4,159.7 million, a 27.9% increase from $3,252.7 million in 2024[236]. - Total operating expenses as a percentage of revenue increased to 6.4% for the three months ended March 31, 2025, compared to 5.6% in 2024[226]. - Research and development expenses increased to $162.9 million for the three months ended March 31, 2025, compared to $116.2 million in 2024[225]. - Sales and marketing expenses rose by $10.3 million (20.7%) to $60.0 million for the three months ended March 31, 2025, primarily due to increased employee-related costs and advertising expenses[244]. - General and administrative expenses increased by $17.4 million (32.8%) to $70.5 million for the three months ended March 31, 2025, mainly due to higher professional and service fees[245]. - Total operating expenses for the three months ended March 31, 2025, were $293.4 million, a $74.3 million (33.9%) increase compared to the same period in 2024[240]. - Research and development expenses increased by $46.7 million (40.2%) to $162.9 million for the three months ended March 31, 2025, driven by workforce expansion and product development costs[242]. Tax and Interest - The effective tax rate increased to 5.1% in the three months ended March 31, 2025, from (5.2)% in the same period of 2024[213]. - The effective tax rate for the three months ended March 31, 2025, was 5.1%, compared to (5.2%) for the same period in 2024, reflecting changes in stock compensation tax deductions[256]. - Interest expense increased by $7.2 million (116.1%) for the three months ended March 31, 2025, primarily due to interest charges on convertible notes[252]. Cash Flow and Financing - Net cash provided by operating activities increased by $2,634.1 million for the nine months ended March 31, 2025, compared to the same period in 2024, primarily due to a significant increase in working capital[262]. - Cash and cash equivalents were $2.5 billion as of March 31, 2025, up from $1.7 billion as of June 30, 2024[258]. - Net cash provided by financing activities decreased by $3,478.2 million for the nine months ended March 31, 2025, primarily due to reduced proceeds from the issuance of common stock[264]. - The company closed the offering of $700.0 million aggregate principal amount of 2028 Convertible Notes on February 20, 2025[266]. - As of March 31, 2025, the outstanding principal indebtedness under credit facilities was $107.0 million[271]. Market and Economic Factors - The growing demand for AI and data center capabilities is expected to drive further product demand and market expansion[211]. - Macroeconomic factors such as labor shortages and supply chain disruptions may impact future financial performance[212]. - Future capital requirements will depend on growth rate, development spending, and expansion of sales and marketing activities[268]. - The company will continue to evaluate new business opportunities and markets, which may dictate additional facilities and capital expenditures[267]. - A 10% change in interest rates is believed to not have a significant impact on the company's results of operations[271]. - The company maintains a portfolio of cash equivalents and short-term investments to minimize market risk associated with interest rate fluctuations[270]. Capital Expenditures - Capital expenditures for the remainder of fiscal year 2025 are anticipated to be in the range of $45.0 million to $55.0 million, primarily for global manufacturing capabilities and new product tooling[267].

Super Micro Computer ( SMCI ) ’s share price crashed 17% earlier this month when the company said, based off of its preliminary (unaudited) results, that it badly missed its own top-line guidance. Last week, Super Micro Computer submitted its full earnings sheet which causedAnalyst’s Disclosure: I/we have a beneficial long position in the shares of SMCI, NVDA, AMD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving ...

Core Viewpoint - Super Micro Computer has faced significant challenges, including disappointing fiscal results and weak guidance, leading to a nearly 50% decline in stock value since mid-February 2025 [1][5]. Financial Performance - For fiscal Q3, Supermicro reported a revenue increase of 19% to $4.6 billion, but this fell short of the earlier guidance of $5 billion to $6 billion [5]. - The fiscal Q4 guidance is projected to be between $5.6 billion and $6.4 billion, which is below the analyst consensus of $6.82 billion [5]. - The company has consistently lowered its revenue guidance over the past year, indicating ongoing operational struggles [3][11]. Gross Margin Issues - Supermicro's gross margin decreased to 9.6% in the latest quarter, down from 11.3% a year earlier, reflecting ongoing pressure in a low-margin business environment [4][8]. - The company anticipates gross margins to remain around 10% in fiscal Q4, showing little sign of recovery [9]. - The decline in gross margins is attributed to increased price competition and tariff pressures, particularly related to the transition in GPU technology [9][8]. Market Dynamics - Customers are delaying platform decisions, impacting sales forecasts, as they evaluate competing GPU technologies from Nvidia [6][7]. - The company operates in a highly competitive industry with limited differentiation, which complicates its ability to maintain margins [8]. Investment Considerations - Despite a low forward price-to-earnings ratio of under 9x based on fiscal-year 2026 estimates, there is uncertainty regarding whether these estimates will need to be revised downward [12]. - While Supermicro could benefit from increased AI infrastructure spending, it operates in a low-margin business and lacks the technological advantages seen in competitors like Nvidia [13].

Core Insights - Supermicro (SMCI) reported a Q3 earnings miss, with gross margins declining to 9.7% and earnings per share (EPS) nearly halved sequentially, yet the stock maintained a key support level at $30 [1] Company Analysis - Leadership & Management: Supermicro has a proven track record in scaling businesses, demonstrating smart capital allocation and insider ownership, alongside consistent revenue growth and credible guidance [1] - Financial Health: The company shows sustainable revenue growth with efficient cash flow, a strong balance sheet, and a long-term survival runway while avoiding excessive dilution and financial weakness [1] Market Positioning - Competitive Positioning: Supermicro benefits from a strong technology moat and first-mover advantage, with network effects driving exponential growth and market penetration in high-growth industries [1] Investment Methodology - Valuation: The analysis includes revenue multiples compared to peers and discounted cash flow (DCF) modeling, ensuring downside protection with significant upside potential [1]