Supermicro Stock Slips 46% in 3 Months: Should You Buy, Sell, or Hold SMCI?

Core Viewpoint - Super Micro Computer (SMCI) has experienced a significant decline in stock price, dropping approximately 46% over the past three months and sitting nearly 57% below its 52-week high, despite being a leading supplier in the AI infrastructure market [1][2]. Group 1: Company Performance - Supermicro remains a key player in providing high-performance servers and storage systems for AI workloads, but its execution has faltered, leading to a slowdown in growth and pressure on margins and earnings [2]. - The latest earnings report for Q1 fiscal 2026 revealed net sales of $5 billion, a decline of 15.5% year-over-year, attributed to timing issues with large customer orders and changes in product mix [3]. - The company's growth rate has consistently slowed, with a top-line increase of only 7.4% YoY in Q4 fiscal 2025, following much higher growth rates in previous quarters [4]. Group 2: Profitability Challenges - Profitability has deteriorated, with adjusted gross margin falling by 360 basis points to 9.5% in the last reported quarter, and adjusted EBITDA margin declining by 320 basis points [5]. - For the full year, adjusted gross margin decreased from 13.9% in fiscal 2024 to 11.2% in fiscal 2025, indicating ongoing challenges in maintaining profitability [5]. Group 3: Future Outlook - Management expressed optimism about potential growth in Q2 fiscal 2026, citing sustained demand for AI-focused GPU platforms as a key driver for revenue [6].