Jul. 2 at 12:03 PM
$SMCI is one of the biggest valuation disconnects in the market. It’s time for the markets to get this one reconnected.
Look at the comparison:
• Dollar Tree: ~
$21B revenue | ~5% margins | ~
$23B market cap
• Southwest: ~
$27B revenue | ~5% margins | ~
$25B market cap
• Adobe: ~
$27B revenue | ~
$81B market cap
• Electronic Arts: ~
$10B revenue | ~
$51B market cap | ~10–12% margins
Now compare that to SMCI:
➡️ ~
$40B revenue
➡️ ~8–10% margins
➡️ ~
$18B market cap
➡️ ~
$29 stock price
Find another company generating around
$40B in annual revenue with positive margins trading at this valuation. It’s extremely difficult.
The market is pricing in fear, not the business. If SMCI continues executing, improves margins through higher-value software, liquid cooling, and a richer product mix, today’s valuation could look like a major disconnect in hindsight. It’s
Revenue matters. Earnings matter. Cash flow matters. Over time, fundamentals tend to win.
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