Aug. 17 at 11:12 AM
$SMCI 🚀 THIS is what a real AI infrastructure inflection looks like.
Barron’s just highlighted why Supermicro’s earnings were received so differently from Cisco’s, and the numbers tell the story:
🔥
$1.70 EPS vs.
$0.92 expected — ~85% BEAT
🔥 17.6% gross margin vs. 9.5% YoY — an 810 bps expansion
🔥 FY27 revenue guidance:
$65B–
$72B vs.
$53B Street estimate
🔥 Shares gained 41% in five sessions
🔥 Best 5-day run since May 2025
The margin expansion may be the biggest signal. Raymond James specifically pointed toward improving product mix, while strong AI demand is giving SMCI greater pricing power.
And here’s the valuation setup that has me bullish: despite becoming one of the clearest beneficiaries of hyperscaler AI infrastructure spending, SMCI was still DOWN 12% over the prior 12 months entering this rerating while Cisco had gained 63%.
Translation: the market spent months pricing SMCI for disappointment. Instead, it got massive earnings leverage, dramatically better margins and FY27 guidance up to
$19 BILLION above the Street’s prior
$53B estimate.
AI needs GPUs. GPUs need high-density racks, power, networking and increasingly liquid cooling.
SMCI is sitting directly in the middle of that infrastructure buildout.
This rerating may have only just begun. 🐂🔥
$NVDA $AMD $DELL $CRWV #AI #DataCenters
