Super Micro Computer (SMCI) Week in Review: 11% Stock Drop Despite 123% Growth

Core Viewpoint - Super Micro Computer (SMCI) experienced an 11% stock drop despite reporting a 123% year-over-year revenue growth, primarily due to concerns over margin compression and insider selling [1]. Group 1: Financial Performance - Super Micro reported $12.7 billion in revenue for Q2 fiscal 2026, exceeding Wall Street's expectations of $10.3 billion, marking a 123% increase year-over-year [1]. - The CEO raised the full-year revenue target to $40 billion, describing it as "conservative" [1]. - Gross margins fell to 6.3%, the lowest recorded, down from 15.6% in late 2023 and below 10% at the beginning of 2025 [1]. Group 2: Market Sentiment and Analyst Opinions - Goldman Sachs turned bearish on Super Micro, citing margin compression and limited bargaining power with hyperscaler customers [1]. - Analysts from JR Research downgraded the stock to Hold, highlighting risks from increasing competition, particularly from Dell and potential Nvidia offerings [1]. - Retail investor sentiment on platforms like r/wallstreetbets shifted from bullish to bearish within the week, indicating a loss of confidence in the stock [1]. Group 3: Insider Activity - Multiple executives sold shares in late November 2025, including CEO Charles Liang and 10% owner Sara Liu, each selling 5,000 shares [1]. - The largest recent transaction involved Director Sherman Tuan selling 48,630 shares at $33 [1]. - There have been 60 insider sales over the past year with no open market purchases, raising concerns among investors about insider confidence [1].