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

We came across a bullish thesis on Super Micro Computer, Inc. on Investment Edge’s Substack by David Vicuña. In this article, we will summarize the bulls’ thesis on SMCI. Super Micro Computer, Inc.’s share was trading at $31.21 as of January 28th. SMCI’s trailing and forward P/E were 24.57 and 16.50 respectively according to Yahoo Finance.

Supermicro, Inc. (SMCI) is emerging as a foundational player in the global AI infrastructure build-out, providing high-performance servers and storage solutions critical to hyperscalers and major tech companies. Its competitive edge stems from speed to market, deep strategic partnerships with NVIDIA, AMD, and Intel, and proprietary technology, enabling first access to the latest innovations, such as the Nvidia Blackwell GPUs.

SMCI has played a pivotal role in cutting-edge data center projects, including Musk’s xAI Colossus 1 and the upcoming Colossus 2, which is poised to become the largest AI factory in the world. Additionally, SMCI’s Data Center Building Block Solutions (DCBBS) offers best-in-class cooling, management software, and customizable solutions for cloud, AI, and networking deployments, positioning the company to capture substantial economic upside from the AI compute expansion.

While the company has experienced margin compression due to aggressive scaling and volume-driven pricing for hyperscalers, this reflects a strategic “land and expand” approach rather than a loss of pricing power. SMCI’s market share in AI server solutions has grown from 6% in 2022 to 23% in late 2025, demonstrating strong demand and validation of its technology. These short-term margin sacrifices are expected to convert into higher operating leverage and profitability as installations mature and manufacturing efficiencies improve.

At current prices, SMCI trades at modest multiples (forward P/E 20.37x, P/S 1.05x), suggesting the market is overemphasizing execution risks relative to its growth potential. With DCBBS adoption accelerating, expanding margins, and continued strategic execution, SMCI is well-positioned to gain share from incumbents like Dell and HPE, and could see a meaningful rerating. For investors, this represents a compelling long-term opportunity in AI infrastructure, combining a leading product suite, validated market traction, and attractive risk/reward dynamics.

Previously, we covered a bullish thesis on Super Micro Computer, Inc. (SMCI) by Taylor Nichols in March 2025, which highlighted its rapid growth in AI-optimized servers, Nvidia partnerships, and global expansion. SMCI’s stock price has depreciated by approximately 8.90% since our coverage due to market volatility and margin pressures. David Vicuña shares a similar thesis but emphasizes SMCI’s role in large-scale AI data centers and its Data Center Building Block Solutions.

Super Micro Computer, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held SMCI at the end of the third quarter which was 48 in the previous quarter. While we acknowledge the risk and potential of SMCI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SMCI and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.